A Brief Note On International Financial Reporting Standards Essay

The U.S is moving toward IFRS (Forgeas, 2008). In the near future, all US company may need to report financial statements under IFRS. This makes the adaptation of IFRS unavoidable. Recently, some large multinational

With the growth of international business there is a need to standardize financial statements globally. Presently there are “approximately 120 foreign private issuers currently that report to the Commission using IFRS financial statements.” By standardizing accounting practices investors will be able to make informed decisions based on comparability and accuracy of financial statements. The SEC released this statement in 2008, “We believe that IFRS has the potential to best provide the common platform on which companies can report and investors can compare financial information.” The SEC has created a “Roadmap” or plan to convert US GAAP over to IFRS. According to The Committee of

Over a decade ago, it was believed that the whole world would likely adopt the Generally Accepted Accounting Principles (GAAP). At the point in time, the International Financial reporting Standards (IFRS) was only about ten years old. In the last decade, the IFRS has been adopted in many growing countries. Currently, it is anticipated that the U.S. will converge its GAAP with the international IFRS, leaving behind only a modified IFRS. This may occur as early as 2014.

International Financial Reporting Standards (IFRS), represent the norms that were introduced by IASB. Being an independent organization that was not operational to earn profits, IASB, also known as, International Accounting Standards Board, incepted IFRS to facilitate public companies around the globe. IFRS presented a framework that served as a guide for these corporations directing them on preparation and disclosure of the financial statements. The International Financial Reporting Standards offered general guidance to the seekers concerning the financial statements. The standards never strived to set industry specific reporting principles or regulations.

IFRS is a set of accounting standards promulgated by the International Accounting Standards Board (IASB), an international standard-setting body based in London. It was designed as a common global language for business affairs so that company accounts are comparable and understandable across international boundaries (Ghosh, 2010). In June 2002, the European Union (EU) adopted an IAS Regulation requiring European companies listed in an EU/European Economic Area (EEA) securities market to prepare their consolidated financial statements in accordance with IFRS starting in 2005 (United Kingdom).

Măciucă, Ursache, Moroşan, and Apetri (2014) state IFRS and GAAP are two similar systems but they are not identical. IFRS has been accepted by the U.S. since 2008. Prior to 2008, companies had to reconcile financial records into GAAP format. Financial Accounting Standards Boards (FASB) and International Accounting Standards Boards (IASB) must continue to merge both standards for the benefit of all. Smith (2012) analyzed the financial data from international companies operating in the U.S. in 2005 and 2006 and discovered no significant differences between GAAP and IFRS. The differences between GAAP and IFRS can be cosmetic and substantive (p.

For years, IASB and FASB have been working diligently on convergence with IFRS. Different countries develop their own accounting standards based on their unique rules, principles, business base, and tax; however, with globalization it’s very important to reconcile between different accounting standards. Two major standards are the US GAAP and IFRS, and they share many differences and similarities. One of the main differences is the conceptual approach and framework, IFRS is principle based whilst US GAAP is rule based (Forgeas, 2008). When comparing IFRS and US GAAP, we can discover many differences in several areas. Based on note 27 of Swisscom’s consolidated financial statements, today we are going to reconcile and restate its financial statements based on capitalization of interest cost, restructuring charges, depreciation expense, capitalization of software, and restructuring charges of affiliates.

In the global business arena, there are two main institutions whose accounting standards are used for financial reporting, Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). The IFRS, whose rules are established and maintained by the International Accounting Standards Board (IASB), is the most widely used of the two institutions but the primary choice for the United States continues to be GAAP, whose standards are established and maintained by the Financial Accounting Standards Board (FASB). Although both systems have many similarities, there are a variety of significant differences that have a great impact on how reporting amounts are calculated and reported to the general public.

The accounting profession worldwide has longed for the harmonisation of the various accounting codes practised by different countries. A set of international standards has been developed with help from the US, Britain, Ireland and the EU in general. International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that is becoming the

The International Financial Reporting Standards, otherwise widely known as the IFRS, are a set of high quality financial reporting standards that are designed to be used globally by profit making enterprises. The continuous development of such international standards is an example of the international harmonization witnessed in the global financial sector over

There are two distinct methods of accounting for finances in the business world. These two methods are the methods both prescribed by the U.S., which is known as the generally accepted accounting principles (GAAP), and that which is used by the international community known as international financial reporting standards (IFRS). GAAP is regulated by the financial accounting standards board (FASB) while IFRS is regulated by the international accounting standards board (IASB). These two methods are currently under a process which is known as convergence or harmonization so that the United States will eventually become integrated into the global community (Miller, S. E. 2009). This will cause financial statements to be more usable for more people across the globe as well as enhance citizens of the U.S.’s ability to perform business more efficiently internationally.

There is no surprise that the United States is taking its precious time conforming to someone else’s standards. For years, teachers and engineers from around the world have been inquiring why the United States has not switched to the metric system in its classrooms and stop teaching the old method of measurement. After the long fight to change the standard, teachers now take time to introduce the subject in class. Mirroring the struggle to get the metric system taught in classrooms, it is now time for the United States to make a decision in the accounting profession. The International Financial Reporting Standard was supposed to be the universal standard of accounting across every nation by the year 2015, but the United States Security and

International Financial reporting standards (IFRS) and General accepting accounting principles (GAAP) convergence issue began in the late 2000’s. International Financial Reporting Standards (IFRS) are a set of standards stating how particular types of transactions and other events should be reported in financial statements. Therefore, business and accounts can be understood from company to company and country to country. General accepting accounting principles (GAAP) are set of common accounting principles, standards and procedures that companies use to produce their financial statements. GAAP are a combination of accurate standards that are simply the commonly accepted way of recording and reporting accounting information.

The (IASB) International Accounting Standards Board published International Financial Reporting Standard 8 (IFRS 8) Operating Segments on 30 November 2006. The standard superseded IAS 14 Segment Reporting, which was applicable pursuant to Regulation 1606/2002/EC (IAS Regulation).

The Conceptual Framework Chapter on Qualitative Characteristics does not Include Prudence. Prudence has been Omitted because it is incompatible with Neutrality