Favorable Business Climate for Transition to International Financial Reporting Standards: Criteria and Pathways for Achievement

Abstract

The research addresses the issue of elitism in international trade and the barriers in global markets arising from the elitist criteria for transitioning to International Financial Reporting Standards (IFRS). The research aims to identify criteria and pathways for achieving a favorable business climate for the transition to IFRS. Based on international statistics from the World Bank for 2019–2021, the authors identify the determinants of the adoption of IFRS using regression analysis. The authors performed econometric modeling of participation in international trade on global markets based on IFRS factors. As a result, the research selected criteria for a favorable business climate for transitioning to IFRS. The selected criteria are feasible for adherence by all countries and ensure the inclusivity of IFRS. The selected criteria include (in decreasing order of significance): improvement of the investment climate, development of public–private partnerships, overcoming the shadow economy, and strengthening the legal environment. The theoretical significance of the author's conclusions lies in the reevaluation of criteria for a favorable business climate for transitioning to IFRS in the context of new, multipolar globalization. The conclusions formulate a set of inclusive criteria that support free international trade and the openness of global markets. The practical significance of the results obtained in the research is that they outline a path to achieving a favorable business climate in Russia and propose a set of authorial recommendations for transitioning Russian businesses to IFRS.

Citation

Popkova, E.G. and Ergasheva, S.T. (2024), "Favorable Business Climate for Transition to International Financial Reporting Standards: Criteria and Pathways for Achievement", Eshov, M.P., Abdurakhmanova, G.K., Burkhanov, A.U., Abdusalomova, N.B. and Ergasheva, S.T. (Ed.) Development of International Entrepreneurship Based on Corporate Accounting and Reporting According to IFRS (Advanced Series in Management, Vol. 33A), Emerald Publishing Limited, Leeds, pp. 7-13. https://doi.org/10.1108/S1877-63612024000033A001