Application of Accounting Policies

Your boss owns 60% of a horse stud in Australia, the other 4 owners hold 10% each. The Horse Stud is valued at US$10 million (assets $9 million and liabilities $1 million) and mainly sells horses in Australia. He is concerned that the cost to comply with the International Accounting Standards and the Australian Accounting Standards in producing the Financial Statements is expensive and questions whether there is a benefit to the cost incurred in so comply with them, given they only sells two horses a year overseas and have a small working capital debt (no long-term debt). Write a memo to your boss explaining the cost versus benefit rule (cost constraint) and how it is applied in practice.