As accounting systems develop and advance through the times, it has been important to have more comparable global accounting standards. This essay will identify and discuss the nature of the accounting system used in Switzerland and explain the differences between the Swiss accounting system and International Financial Reporting Standards (IFRS). Switzerland is a small country located in central Europe with a population of roughly 8.4 million, there is also 4 official languages spoken in Switzerland. This and the fact that Switzerland is landlocked; surrounded by 5 countries (Germany, Italy, France, Austria and Liechtenstein) can play a part in influencing the Swiss’ accounting system. As Switzerland is not in the European Union they do not have to follow the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Instead the Swiss have developed an accounting system called Swiss GAAP FER (Generally Accepted Accounting Principles/Fachempfehlungen zur Rechnungslegung) which was mainly developed with small and medium businesses in mind and its purpose is to give companies a precise picture of its financial situation easier and cheaper than the standard IFRSs. Although, regardless to Switzerland’s exception to compliance of IFRS, majority of Swiss companies who have equity shares which are listed on the main board of the Swiss Exchange will not be permitted to use Swiss GAAP and are required to prepare all financial statements using either IFRSs or US GAAP. The only exception to this rule is for Swiss companies which are non-multinational and primarily operate in Switzerland, in other words smaller companies. Swiss companies such as Georg Fischer, who decided to adopt Swiss GAAP as their main accounting system in 2013 and other companies such as Swatch and PUBLI Groupe have as seen an increase in The nature of Switzerland’s accounting system is very strong and sustainable because they have made a simpler system in order to measure and report performance using the Swiss GAAP and larger businesses can still use EU IFRS in order to still be able to report finances on an international level.Even though Swiss GAAP and IFRS are more similar than they are different, there still is differences between the Swiss GAAP and IFRS which both have advantages and disadvantages, such as international recognition. Swiss GAAP FER isn’t recognized outside of Switzerland so multinational businesses and businesses who might chose to operate internationally cannot use Swiss GAAP as a main accounting system. This can be an issue to global stakeholders because of the language barrier which come with the swiss accounting system, . Smaller businesses may not have the resources to convert Swiss GAAP financial statement into an IFRS financial statement. This issue along with cultural differences are some of the main reasons why full convergence of national accounting systems such as US GAAP, IFRS and Swiss GAAP can be seen as far fetched. Another difference is the presentation of financial statements, IFRS require detailed information to be disclosed for most of the accounting topics but for Swiss GAAP FER only a limited amount of information is needed to be disclosed and in the notes section of the financial statement. In addition to this, Swiss GAAP FER also requires the statement of income to be split between operating income, non-operating income and extraordinary income. This is not required in terms of IFRS. There is also many employee benefits when using Swiss GAAP and IFRS such as, for IFRS there’s a defined benefit or defined contribution plan and Swiss GAAP has no distinction based on the type of plans and economic effects are determined based off of the financial situation of the pension fund.