Summary
1) IFRS will help to see all Financial Statements homologating criteria which contributes to improve investment activity around the world. 2) Even mentioned IFRS must be reviewed in some aspects also, because some issues do not reflect a the real business activity.
Analysis
As all new paradigms IFRS´s will become a future stadium of new discutions about the Financial Statements interpretation and a reborn of the unique and same question not answered during a long time during USGAAP period ...
¿Are these statements inform us the actual business situation?
Or much better...
1) ¿Shareholder and Investor can be confident about companies results according to new rules?
2) ¿Are their interests enough protected?
3) ¿Are the results representing the company's fair value?
Even IFRS will help to homologate all criteria about Financial Statements (FS) no matter where they are issued (Europe, North or South America) the big issue will be that those FS must represent besides the "Financial Situation" also all other Business Aspects if we expect that new rules contribute to improve the investing activity around the world among other "technical" issues as i.e. how assets must be registered to represent the fair value to be shown on FS.
Talking about that issue the IFRS's change substantially the way how recognize the fair value of "Set up or Reorganizational Expenses" which is a business fact and there was a big discution in the past about it.
I can not recognize as a fair value when new rules will push us to get all those expenses in only one "economic year", because the "conservative" principle was extremelly modified.
¿What will happen with Farming Business, Trees Plantations, Tourism activity, among others?
If we understand the spirit of the new rules named "International Financial Reporting Standards" is understood that we must report as fairly as possible the operational and financial information which are not separated one of each other. Moreover we have to think about how business are reaching their strategic plan and how FS are reflecting that information in an appropiate way to "inform" to shareholders how is their investment be treated.
It does not mean that FS may reflect other facts and figures that real ones just must reflect as fairly as possible the business situation in order to understand how the business managing is doing their job.
As Mr. Robert Herz said the transition can take a long time also will take time get rules that going along to best business practices.
I hope waiting time be an interesting "shared knowledged field" where the world will discuss criteria about how FS readers will see "the same picture style no matter where painters comes from."
Also, Certified Public Accountants around the world will be able to perform their job without barriers related to "local" accounting standards which will be an interesting new and global paradigm.
Good for us.
