Problems with convergence
Because there are lots of positives for global business in having global accounting standards, this does not mean that there are not negatives as well. From the individual company perspective, the biggest disadvantage is the cost of making the transition. All the accounting managers in a group will need training, and there may be significant systems changes as well. Estimates of costs vary. A study by the Institute of Chartered Accountants of England and Wales for the European Commission suggested the following estimate:
Clearly the cost varies a lot with size and with the extent to which you can use your own staff to carry out the transition as opposed to hiring outside consultants. It also depends on whether you were already using accounting standards that were similar to IFRS, such as US GAAP or UK GAAP, or relatively different such as French GAAP or German GAAP. Moving to different standards may also affect your monthly management reports so that it changes how managers see the company.
From the individual company perspective, the biggest disadvantage is the cost of making the transition
Not all large companies can get benefits after incurring these costs. The large, national player with little foreign activity and no secondary listings will see very little advantage. The ...