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1. Do you think the BMW Group should prepare financial statements in accordance to GAAP (US-based)...

1. Do you think the BMW Group should prepare financial statements in accordance to GAAP (US-based) or International Financial Reporting Standards? 2. Why?

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Answer #1

Answer:

BMW is a Germany company based in Munich. It is into luxury vehicle and motor cycles. It was founded in 1916.

BMW Group should prepare financial statements in accordance to International Financial Reporting Standards (IFRS) because of the following reasons:

  • BMW is a multinational company and has presence many countries. IFRS are internationally accepted accounting standards so using IFRS makes the financial statements of BMW uniform consistence and comparable..
  • GAAP is U.S based standards that is used in USA. BMW is German company, all domestic companies of Germany whose securities are traded in European market, are required to use IFRS because these are adopted by EU.
  • IFRS maintain the standardized financial reporting that improves the comparability of financial statements in the financial markets
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