Convergence Between Ifrs And Usgaap

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CONVERGENCE BETWEEN IFRS AND USGAAP INTRODUCTION International Financial Reporting Standards (IFRS) are a set of accounting standards that are developed by the International Accounting Standards Board (IASB). This accounting standard is followed by approximately 130 countries as propagated by IASB. IASB is an independent accounting setting body that is based in London. It consist of 14 voters from multiple countries, including United States. Another accounting standard that is being followed is USGAAP that was promulgated by International Accounting Standard Committee (IASC). There has been a serious project going on for the convergence between IFRS and USGAAP from the very beginning of formulation of IFRS in 2001. BACKGROUND…show more content…
Though IASC worked hard to achieve a global accounting standard, it failed due to various factors. One of the main factor was that “A standard that is being accepted by one authority should also be accepted by other authority as well.” But IASC failed in this factor since these standards were not accepted by other leading jurisdiction. In 2001, IASC was replaced by IASB as the board for setting these standards. This board consist of 14 experts having recent practical experience in setting accounting standards. They bought in the strategic working party, which took a new look at IASC’s structure. IASB bought in many structural changes. But one of the most notable change among that was replacing the part-time volunteer board with full-time member. The four main objective of IASB are • To develop better accounting standards. • To promote the use of those standards. • To fulfill the need of everyone with the standards. • To bring in a global accounting standards. CONVERGENCE BETWEEN IFRS AND USGAAP One of the most notable debate that is being going on in the business industry for over a decade is the convergence between IFRS and USGAAP. Most of the countries uses IFRS for representing their financial statement except US. US is one of the global business leader and having US follow IFRS is so necessary that a business can represent its financial statement on the same basis of foreign nations and it is also easy to benchmark. Though most of the countries follow IFRS, the
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