The direct advantage of IFRS for investors, it means that IFRS has approval the international standard to extensive and tender diversity fairness about potential for investors. There are many direct advantages of IFRS for investors. First, IFRS was setup regulation to make financial statement information more accurate, comprehensive, and time. It should be appropriate with nation standard in most countries and included Europe. IFRS provide to explain about the detail of other sources and valuation in the equity market because it will help to reduce the risk for investors. Second, small investors do not has more experience to predict the financial statement information from other source but in the other hand, the professional of investors can be able to predict information of financial statement from other source. Therefore, IFRS was improved quality of financial report to be better-inform because when investors of many size trade with better-informed professional, it will help to reduce the risk. Based on Glosten and Milgrom (1985), Diamond and Verrecchia (1991) and Leuz and Verrecchia (2000) they known this situation as adverse selection (Hidden information so that it will make high risk for investors). Third, IFRS was adjusted the international standard by dislodging many international differences of accounting standard and financial report standard. Hence, it was affect to the process cost of investors will be reducing after IFRS was eliminated and compare standardize with internationally. It sends the positive for foundation to create a large regulation arrangement of financial database. Fourth, IFRS was increase more efficiency of financial information. It was effect to market because it can be combine the stock market price and it will increase more efficiency to market. Many investors can predict and gain more benefit. Last, according to Bradley, Desai and Kim (1988) they said that IFRS was eliminate the conflict among differences in accounting standard and reduce the barrier among difference countries to acquisitions and divestitures. It is affect to investors to increase takeover guerdon. However, IFRS will have many benefits to investors and provide to implement standard to reduce risk for investors and reduce process cost information.
Another one indirect advantages of IFRS for investors, it means that IFRS has not concern only the investors but IFRS has concern about the quality of standard and transparency of standard to many firm. IFRS has additional about regulation on standard to protect the risk to investors and hidden information of accounting statement. In supposition it should help direct to reduce the costs of equity capital for firm. First, it will help to firm to increase value of stock price thus it will attractive investors to investment in firm. Second, it was improved the usefulness of financial statement information about the agreement between firm and other of parties, well-know lender and managers (Watts 1977 and Watts and Zimmerman 1986). Third, the management needs to more concern about the transparency of financial statement and create more influence to attract investors for investment with company. The manager was responsible for the new investors if the NPV has negative by the manager need to find out the strategies and the way to solve this problems such as 'pet' project and 'trophy' acquisitions (Ball 2001and Ball and Shivakumar 2005). Fourth, consistent with Ball (2004) he said about some case of DaimlerChrysler AG, it was a list on the New York Stock Exchange and it was follow the United Stated GAAP to do financial statement report. After that the automobile business met a lower profit margin with deepen of market competition for product. Fortune, Daimler does not take a long time for this situation of loss market activities. Bushman et al. (2006) report explains that is opportune of financial statement recognition losses and accepts negative NPV investments. Hence, that is a time for IFRS because IFRS was promised to increase transparency and loss recognition on standardize. It will help to cover the benefit of agreement between firms and their managers and reduce agency costs between managers and stockholders and improve quality of corporate governance. It will make to gain potential because manager needs to concern more benefit of investors. Fifth, IFRS helps about the loss recognition in the financial statement by concern about debt agreement infringement because it makes a direct affect to economic loss but it can solve by reduce the value of outstanding debt (Ball 2001, 2004; Ball and Shivahumar 2005 and Ball et al. 2006). IFRS was increase efficiency of contracting in debt market and reduce cost of debt capital. It will help to edit the book value of assets and liabilities also earning and stockholder' equity on agreement by based on financial statement variables. Sixth, Ashbaugh and Pincus (2001), Hope (2003) and (2003) they said that the one institution academic of accounting explained that accounting standard report can make statement more transparency and more accurate so that accounting standard must to relate with financial statement report. IFRS can help to firm and investors ability to forecast earnings. IFRS help to develop the analysis about earning with more accurate and easier to forecast. In other hand, if there has require more quality and information of earning, it will difficult to predict and more flexible. Last, IFRS has concern about the fair value accounting; Fair value accounting means rules aim to incorporate more-timely information about economic gains and losses on securities, derivatives and other transactions into the financial statement, and to incorporate more-timely information about contemporary economic losses or impairment on long term tangible and intangible assets(Ball, 2006). IFRS try to initial and focus more on this point.
Moreover, the advantages of IFRS for fair value accounting; it means that IFRS has concern to influence them to provide more fair value accounting on statement. First, IAS 16 is standard about property, plant and equipment. It will provide for detail to classify the transaction of fair value option. Second, IAS 36 is standard about impairment of assets. It will provide detail about pay back and revoke of impairment assets. It helps to increase fair value of impairment assets. Third, IAS 38 is standard about intangible assets. It helps to understand more about the details and estimate the value of intangible assets at the market price and make its more fair value. Fourth, IAS 39 is standard about financial instruments: recognition and measurement. It demand to show the clear details at financial instruments about loans, receivable, securities and other for increase fair value. Fifth, IAS 40 is standard about investment property. It provides information to make it fair value for investment property. Sixth, IFRS 2 is standard about share-based payment. It concern about the detail of payment for stock, option and other at accounting to be more fair value. Last, IFRS 3 is standard about business combinations. It requires showing details about minority interest to be recorded at fair value. Almost list of standard will be improve and develop to make more fair value at accounting statement and financial report (Ball 2006). However, in fact the IFRS use implement to measurement about assets and liabilities to be more fair value by limited of both in theory and in practice to create more fair value. IFRS has focus more about record transactions and deal out at first amount of transaction among its element parts that has represented faithfully in the financial statements. . You can find more information as appendix C
In contrast, IFRS has a disadvantage also because IFRS was establish in 2001 so that if it has compare between GAAP and IFRS, it will show that IFRS has less detail, regulation and other than GAAP. IFRS will have some regulation to announcement for solve the problem and protect at particular point for the accounting statement and financial report. However, IFRS make adopting their standard to provide for benefit for others. It will difficult to force many countries to follow the new regulation because the detail of new standard will be more differences detail so that it will need time to learn and understand about the new regulation and standard. If people who use new standard and they will not understand the purpose of standard, it will make a negative signal instead of positive signal.
