The purpose of this essay is to discuss the benefits of adopting international accounting standards, the reasons for national differences and the difficulties in reaching agreement on the standards. There are many advantages to having international standards. Firstly, this essay will only look at 4 benefits, namely comparability, credibility, principles and discipline. Second, this essay will highlight three national differences and evaluate their difficulties in reaching an agreement. Finally a conclusion. Comparability is an accounting principle. Key accounting reports must be reliable; if they are not reliable it is not comparable. If the company cannot make a comparison, the accounts are impaired. For example, the Financial Accounting Standards Board requires that expenses associated with research and development (R&D) be expensed when incurred, but some companies have expensed research and development when it is incurred. While some other companies deferred it on the balance sheet and spent it later. Furthermore, accounts must be reliable and standardized so that investment decision makers can make valid cross-company comparisons. To make this comparison meaningful, accounts are prepared according to the guidelines set by the Financial Reporting Standards. Credibility is linked to similar events, which produce similar results. If companies did a similar event to produce financial reports, which revealed totally different results, the company could lose its credibility, because companies can choose different accounting policies. It is important that financial statements give a true and fair view. The discipline helps protect investors and is linked to the monitoring committee. The mandatory standard…half of the document…five different meanings for the words. The tax system in France and Germany is different from the tax system in the United Kingdom and the United States. In France and Germany taxes are charged on the profits in the accounts, so the tax becomes accounting rules, while the UK and US tax rules and accounting rules are separate as this helps the user. For example, in France and Germany depreciation would be charged on the profit, meaning that everything that the tax rules stipulate must be reported in the accounts. A British accountant will say that this does not demonstrate a true and fair view, even if it is legal to do so. However, depreciation in the UK will be charged separately from profit. Since depreciation can be deferred in the balance sheet and accounted for later. The tax system makes it difficult to obtain international agreement because there can be misinterpretation of the different tax rules used.