Introduction
The adoption of International Financial Reporting Standards (IFRS) aimed to bring uniformity and transparency to financial reporting across countries. This article examines the application of IFRS by Volkswagen and Daimler between 2017 and 2019, exploring whether the adoption process brought clarity or created confusion in their financial reporting.
IFRS Implementation: The Goal of Uniformity
IFRS adoption was intended to enhance the comparability of financial statements, reduce reporting costs, and improve investor confidence. Both Volkswagen and Daimler apply IFRS standards in their financial reporting. The report highlights the specific standards and amendments applied by each company.
Divergences and Interpretations
Despite the goal of uniformity, the application of IFRS can sometimes lead to divergences due to differences in interpretation and application. The report discusses some of the specific IFRS standards and amendments and how Volkswagen and Daimler applied them. This analysis can reveal instances where the application of IFRS might have led to different accounting treatments, potentially making direct comparisons challenging.
Impact on Financial Performance
The adoption of IFRS can significantly impact how financial statements are presented and how specific transactions are accounted for. This article can explore how IFRS adoption affected the key financial statements of Volkswagen and Daimler, such as the income statement, balance sheet, and cash flow statement.
Transparency and Comparability: Did IFRS Deliver?
This article can assess whether IFRS adoption truly improved transparency and comparability in the case of Volkswagen and Daimler. It can analyze whether the financial statements became more understandable and whether investors could easily compare the financial performance of the two companies.
Conclusion
The adoption of IFRS aimed to bring clarity and uniformity to financial reporting, but its application can be complex and may lead to divergences. This article examines the application of IFRS by Volkswagen and Daimler, exploring whether the standards achieved their intended goals of transparency and comparability.
Note: The above content is purely basis a comparison analysis of Annual Reports of VW AG and Daimler AG. The content is to be considered only as research oriented analysis content. This is only a personal opinion from my understanding of both reports. It is a study of the past data from current.
References
Daimler AG. (2018). Annual Report 2017. Available at: https://www.daimler.com/investors/reports-news/annual-reports/2017/ Daimler AG. (2019). Annual Report 2018. Available at: https://www.daimler.com/investors/reports-news/annual-reports/2018/ Daimler AG. (2020). Annual Report 2019. Available at: https://www.daimler.com/investors/reports-news/annual-reports/2019/ GISMA Business School. (2021). Financial Analysis Report Volkswagen vs. Daimler. Volkswagen AG. (2018). Annual Report 2017. Available at: https://annualreport2017.volkswagenag.com/ Volkswagen AG. (2019). Annual Report 2018. Available at: https://annualreport2018.volkswagenag.com/ Volkswagen AG. (2020). Annual Report 2019. Available at: https://annualreport2019.volkswagenag.com/ Image source: Rendered image from above sources with app.Leonardo.ai
