Sheng Ltd. ,a private company,is seeking financing.Why might it be advantageous for Sheng to use IFRS rather than Accounting Standards for Private Enterprises (ASPE)?

Question

Quizplus · Accepted Answer

Using IFRS may enable Sheng to negotiate a lower cost of financing because IFRS is a globally recognized accounting standard that is widely used by international investors, lenders, and regulators. By using IFRS, Sheng can increase its transparency and comparability, making it easier for investors to evaluate and compare its financial performance with other global competitors. This can increase investor confidence and potentially lead to lower borrowing costs. Option A is incorrect because IFRS implementation can be costly due to training and software adjustments. Option B is incorrect because it may not necessarily give Sheng the appearance of an international company as ASPE is also a globally recognized accounting standard. Option C is incorrect because audit fees may not necessarily be lower under IFRS as it involves more complex accounting and additional disclosures.

Sheng Ltd ,A Private Company,is Seeking Financing