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Adapting International Financial Reporting Standards: The Mexican Case
Esperanza Huerta,
Instituto Tecnologico Autonomo De Mexico
Francisco Villanueva, Instituto Tecnologico Autonomo De Mexico
ABSTRACT. Opponents of International Financial Reporting Standards (IFRS) adoption argue that accounting standards most be customized to reflect the business environment of a country. This study analyzes the type of IFRS adaptation undertaken by Mexico. Mexico started a major revision of Mexican Standards. By November 2006, nine standards had been issued. Eight of those standards establish a brand new conceptual framework. This study content analyzed standard NIF A-5. Results shows that no new concepts were introduced and the adaptation process only provided more detailed explanations to concepts copied or paraphrased from IFRS or US GAAP. No legal, social, political, or economical adaptation was performed. Since the standard setting process is costly, complex, and time-consuming, it is still valid to ask whether countries would be better off adopting IFRS rather than developing its own standards. This is particularly important when no local circumstances need to be addressed.
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