discuss the rationale for the global harmonization of financ

discuss the rationale for the global harmonization of financial reporting and disclosure requirements

Solution

The focus and rationale of global harmonization of financial reporting and disclosure requirements is for achieving a level of compatibility for the statements. There is less complication for the companies and individuals to present the financial statements and its interpretations. The differences between financial reporting standards are erased with international harmonization of financial reporting.

When there is achievement of international harmonization in finial reporting then it benefits countries and improves the access effectively for the financial market. The confidence and investor\'s K owned he is increased. According to Wiley (2000) even though the rationale behind harmonization is smooth preparation and presentation of financial statements; there may be differences based on the factors like taxation and political aspects.

It focuses on creation of similar set of procedures with the help of boundary establishment and how they can differ globally.

It also benefits accounting standards on national and international levels.

The disclosure requirements include the information related to nature and the extent of risks which arises from financial instruments. The importance of financial instutments for the purpose of finial position and performance of entity. It includes financial assets, held to maturity investments, loans and receivables, sale assets etc.