With the globalization of corporate business and cross border security listings, the need for a common set of accounting standards to be applied worldwide emerged to the surface. Both the IASB and the FASB have taken steps towards this goal.
As a result, the SEC recently has abolished the reconciliation to US GAAP required from foreign firms listing on US exchanges, allowing them to file using the IFRS.
A. Analyze the costs and benefits of cross border security listings.
B. Discuss major expected costs and benefits of US firms adopting IFRS.
Obviously, the most important benefit of a cross border security listings is diversification of capital. Given how global businesses today are, it is a matter of survival rather than competitive or comparative advantage that sources of funds also be global. This diversification will minimize the risk of capital flight which is a result of market volatility - if the stocks of the company are ...
The major expected costs and benefits for globalized business are determined.