How Ifrs Defines A Contingent Liability And Provide An Example Essay

This research project will inform the reader of the difference between the United States accounting standards and International accounting standards. The United States uses the Financial Accounting Standards Board (FASB) to issue financial reporting procedures. The International Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB). There are proposals for the United States to adopt the International standards. Financial reporting procedures are debated about the United States using the Generally Accepted Accounting Procedures (GAAP) or following the global procedures. This

Since 2002, Financial Accounting Standards Board (FASB) and International Accounting Standards Board’s (IASB) have been working toward “convergence” of US General Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). They have made significant progress in efforts to converge critical accounting standards such as those dealing with revenue recognition, financial instruments and leases. Once these projects are complete, the "era" of convergence will be at an end. Nevertheless, the benefits for investors of eventually getting to consistently applied, high-quality, globally accepted accounting

The purpose of this paper is to describe what accounting convergence means and assess the likelihood of the convergence being completed and implemented in the next five (5) years. IFRS is the principle based set of standards that establish standards and dictate specific treatments. IFRS has become a global standard for companies when preparing financial statements. IFRS consist of multiple reports stated on the Wikipedia website. The two reports that will be discussed in the paper are IFRS and GAAP. GAAP is an Accounting Standard that provides guidance for financial

A joint convergence committee created the members of (FASB) and (IASB). (IASB) is recognized as an independent accounting standard-setting body that is similar to (FASB) that joins (GAAP), and is governed by the (IFRS) foundation. Due to this convergence, (AICPA) believes U.S. adoption of a single set of high-quality, globally accepted accounting standards will benefit U.S. financial markets and public companies by enabling preparation of transparent and comparable financial reports throughout the world, (American Institute of CPAs, 2016). Secondly, (AICPA) is dedicated to supplying the whole accounting profession with information, tools and IFRS.com for instance to assimilate as well as implement a new set of standards. As the (AICPA) supports continual convergence of reliable accounting standards between (IFRS) and (GAAP) the mission of completion between (IASB) and (FASB) is prolonged. (AICPA) will always support funding mechanisms of the body-making

The FASB-IASB convergence project sought to merge U.S. GAAP with IFRS in a way that would combine the best of both standards to make financial reporting easier in a world that grows smaller each day. To say that the project was challenging would be a gross understatement; convergence faced many setbacks that arose out of disagreements about the best way to represent information for a vast set of users. One reason why disagreements arose is because the process for accounting standard-setting is considerably political. When a diverse group of people argues for the interests of massive groups of other very different people, each with their own competing interests, complications are bound to occur. Everyone brings their own issues to the table,

In a previous study on the usefulness of convergence, a comparison of firms implementing IFRS in 27 countries matched against sample of similar size and industry firms in the US found, the use of converged IFRS standard by US firms instead of US GAAP led to a more established accounting system with value relevance comparability (E.Barth, R.Landsman, Lang, & Williams, 2012, p. 6). In contrast, Jamal et al (2010) state “The need for a global accounting regulator is overstated. A global regulator is unlikely to help achieve the stated goals of comparability and consistency of financial reporting on a global basis” Based on the joint standard of IFRS15/ASU606 issued, there appears to be a compromise on both IASB and FASB’s part to include and exclude certain aspects therefore, although the gap is reduced, full convergence is far from being achieved. The decision makers at IASB therefore, due to inability to achieve the true goal of convergence, is resorted to undertake a vague position and compromise with the ‘allocation model’ (now known as ‘performance obligation’ model in the final joint standard issued) (Biondi, et al., 2014, p. 29). Nevertheless, in terms of usefulness to stakeholders, the joint standard addresses the problem arising from the original IAS18&IAS11/ASC605

There is a clear roadmap to social globalization and convergence of US.GAAP – IFRS Standard as prescribed by the Security and Exchange Commission (SEC) for users that set up financial statements in accordance with IFRS as issued by IASB. This followed would lead to a worldwide adoption of IFRS over the next few years. In his work, Barry (2009, p.26-27) states, “The advantage of a single set of financial reporting standards are manifest, particularly as internationalization of business activities became the norm. In particular, having uniform, high quality standards has been extolled as fostering international business relationships, with the goal being the facilitation of cross border capital flows and lowering the cost of capital _ the expected results of the anticipated reduction of perceived accounting risk”.

Countries, including the US, that decide to converge with IFRS yet function under different economic and political environments will inherently implement the universal standard to fit their institutional infrastructures diminishing comparability between nations (Hail). There are significant differences in the foundation of US GAAP and IFRS, specifically IFRS’s principles-based accounting and US GAAP’s

With the number of countries that have switched to the International Financial Reporting Standards (IFRS) for their financial reporting, as well as the continued efforts made between the IFRS and US Generally Accepted Accounting Principles (US GAAP), it is evident that international convergence is an overall appealing idea for global reporting. With that said, US GAAP has worked with IFRS to create a universal standard; and while progress has been made to diminish variances between the standards, there are still large, if not unattainable, efforts ahead of us. The hype over a proposed uniform set of global accounting standards appears to be stunted by the lost efforts in the convergence project between the US GAAP and IFRS. As the Financial Accounting Standards Board (FASB) moves forward with its standards setting, there must be a reevaluation of the goal for reporting standards and efforts with the International Accounting Standards Board (IASB).

Accounting as a profession has its standards that must be followed. The standards are used across the world to enhance uniformity in the reporting framework of financial statements. This is due to the growth in the international trade and cross-boundary trade. Some of these standards include the international financial reporting standards (IFRS), the UD Generally Accepted Accounting Standards (GAAP).

The talks about convergence began in 2002 between the International Financial Standards Board and the Financial Accounting Standards Board. In 2005, the Security and Exchange Commission acknowledged that the day would come when the International Financial Standards would take precedence over the United States GAAP. In the year 2007, it was decided that foreign companies would have the ability to file financial statements in the United States without reconciling the statements to the United States GAAP. This statement modeled the first step for the United States toward accepting the International Accounting Standards. This changeover would give professionals and the Security and Exchange Commission time to inspect the financial statements in respect to the International Accounting Standards and with the Generally Accepted Accounting Standards. After this moment in time, the Security and Exchange Commission issued a road map to present a blueprint of how the convergence would take place. It stated that in between the years of 2009 through 2010, a Security and Exchange Commission staff work plan would be developed to work on the substantive details of the convergence plan (“2015-IFRS in the,” 2014). In the middle of development a Security and Exchange Commission policy statement would be issued to announce more understanding of the IFRS and how it will replace the Generally

(b) The prior objective of mandatory adoption of IFRS is to facilitate cross-border comparability, increase reporting transparency and reduce information asymmetry and thereby enhance the efficiency and competitiveness of capital market (Horton, Serafeim & Serafeim 2013). However, applying IFRS in different countries with different enforcement mechanism can hardly achieve the accounting harmonization, because companies are still willing to adopt their former national regulations that reflect their requirements ,and therefore misled the users of financial report who do not pay attention to these systematic differences by an uniformity on the surface (Deegan 2014). In the given material, there has been various problems when EU endorse the international accounting standards. Not only did the international accounting significantly reflect the Anglo-Saxon accounting practice rather than continental European practice (Dewing & Russell 2008) but also, political, business differences might continue to impose substantial obstacles in the process of accounting convergence and standardisation. Until then, whether the financial information become more reliable and comparable after the adoption of IFRS is still

The objective of this paper is to deliberate the concerns regarding implementing International Financial Reporting Standards in United States. There is no scope that IFRS standards would be fully implemented in the United States. The main reasons are two regulatory bodies Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are unable to integrate on the concept of convergence. Due to current economic conditions, FASB and IASB came together to reduce the differences between U.S. GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). Furthermore, Security and Exchange Commission has

Due to the global integration of business and finance throughout the world, approximately 113 countries have adopted or are working on convergence with IFRS. This paper is a look at the history and an examination of where IFRS stands internationally and with the United States. For several decades the industrialized world has been working toward an international set of accounting standards. Since IFRS has become the de facto international accounting language, it is logical that it will be accepted as that standard in the near future.

The International Financial Reporting Standards (IFRS) has been adopted by a majority of first world countries and emerging markets. However, the U.S. still uses the U.S. Generally Accepted Accounting Principles (U.S. GAAP). The 2008 financial crisis and the cost of implication halted the adoption, but there are other obstacles and implications to take into consideration. One important aspect to consider is the tax implications upon adoption, and this typically translates into how the taxes paid will be affected. The implications to tax arise due to the differences in aspects such as revenue recognition, transfer pricing agreements, compensation, strategies in repatriation, debt agreements, and so on. Specifically focusing on the effective tax rate, the income tax, differences in accounting for assets and liabilities, and income and expenses. Included in this paper will be a short explanation on preparing the accounting profession and accounting systems for IFRS adoption, and other tax implications effects to the accounting world.