McDonald’s Corporation operates in more than 100 countries. As a multinational b
ID: 1199262 • Letter: M
Question
McDonald’s Corporation operates in more than 100 countries. As a multinational business, McDonald’s must comply with the rules and regulations of the countries where it operates. The United Nations is concerned that globalization of business makes it difficult for external stakeholders, including governments, to verify a multinational firm’s data. IFRS has been developed that can be used for financial reporting by companies in countries around the world. Explain IFRS and how would McDonald’s benefit if IFRS were adopted for use in all countries worldwide.
Explanation / Answer
International financial report standered (IFRS) is the global reporting language which is developed for multinationals. Every country have different reporting format, in every country rules and regulations are also different. So if a multi national company use different techniques of reporting then that will be difficult to analyse for investors as well as company employees. These companies are generally fast growing companie so if they dont use IFRS they will not get investors worldwide, they will not be able to sell their bonds, rating agencies like Moody's investor services, Fitch etc. will not give them proper bond ratings.
So for a company like McDonalds always get advantage by following IFRS worldwide.