A major factor underlying the rise of IFRS is that companies needing to seek global sources of capital are at a disadvantage when they only produce financial statements based on the commercial and tax law approach.

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This statement is true. International Financial Reporting Standards (IFRS) have been developed to provide a globally recognized set of accounting standards that companies can use to produce financial statements that are comparable across different countries and jurisdictions. Companies that only produce financial statements based on local commercial and tax law may find it more difficult to access global capital markets, as investors may not be familiar with the relevant accounting rules and may have difficulty comparing financial performance across different companies and countries. As a result, many companies have chosen to adopt IFRS in order to enhance their access to global sources of capital.

A Major Factor Underlying the Rise of IFRS Is That