IFRS: A Report on the Roadmap and Roadblocks to Implementation in the U.S. and Abroad

The issue of adoption of international financial reporting standards (IFRSS) in Australia has been controversial issue since the first time Australian Financial Reporting council (FRC) announced the policy in 2002. Many believe that IFRSS adoption will lead to great advantages such as enhance financial report comparability, improve quality of financial reporting, attract more foreign investor, and other significant advantages. However, some also believe that the adoption merely result in disadvantages and cost for Australian business, accounting profession and even Australian government.

As the responsibilities of the global harmonization of accounting standards IFRS and GAAP transfer to IASB, FASB’s influence is waning. Advantages of the convergence include high quality financial reporting, which lowers cost of capital for investors and the cost of borrowing for companies. However, there are disadvantages to be noted, such as the costs of introducing IFRS to current and potential accountants and the risk of reducing the uniformity of financial reports due to the lax rulings of IFRS, which promotes earnings management amongst companies. Although arguments regarding the convergence remain prevalent, the completion of IFRS and GAAP is inevitable. Come year 2015, accountants, investors, and companies alike will discover whether or not the pros outweighed the cons; or vice versa.

IFRS’s are a single set of accounting standards at a global level for all sectors. Accounting standards are trustworthy statements is the reflection of financial statements to be presented to the stakeholders . United kingdom has already adopted IFRS since 2005.I would be discussing on adoption of IFRS by United kingdom for this paper. The United

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

It has been shown through several studies that there is a link between the success of IFRS to enforcement mechanisms. Barth et al. (2008) assumes that without the existence of effective enforcement mechanisms, such as IFRS, you cannot achieve success.

For nearly half a century, a movement has been underway to establish a high-quality, comprehensive set of international accounting standards, with the goal of facilitating international trade and investment. In the global capital market, differences in the rules of accounting for the purposes of recognition, measurement, and reporting of financial results have impaired the smooth transfer of information across borders. Given that it accounts for nearly a third of the global market, there is considerable pressure for the United States to conform to the International Financial Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board (IASB). While moving to a single set of accounting standards could create

global standard allows them to operate in a single accounting environment worldwide (PricewaterhouseCoopers 2007). The globally positive attitude towards an convergence to IFRS is exemplified by an IFAC survey among

Ankarath, N., Ghosh, T.P., Alkafaji, Y. A., & Mehta, K. J. (2010). Understanding IFRS Fundamentals: International Financial Reporting Standards.

On February 24, the SEC unanimously agreed to publish a statement of continued support for a single set of high-quality global accounting standards. The SEC acknowledged that IFRS is best positioned to be the global standard. Even without a set conversion timeline from the SEC, IFRS has been affecting

IFRS 3-1 describe some of the issues the SEC must consider in deciding whether the United States should adopt

The whole idea of the IAS and IFRS standards is that, since companies want to expand in a global financial market they have to have some principles and international standards to follow which confirms that there is actual regulation of financial markets. Through these standards capital markets that are placed in various authorities can make the most proficient capital streams that are valuable to controllers, associations, and the market in general. IAS 16

The transition to the International Financial Reporting Standards (IFRS) has not been the easiest. Some counties have faced challenges. One big challenge is that not all countries have adopted IFRS. India, Japan and the US are top economic countries that have yet to embrace IFRS. If

On 1st April 2001, a new body named as International Accounting Standards Board (IASB) took over the responsibility of ISAC for setting International Accounting Standards. The IASB adopted the existing IAS issued by ISAC and standards of Standing Interpretations Committee (SIC). However, the new standards developed and issued by IASB are known as International Financial Reporting Standards (IFRS).

“The IASB also seeks active co-operation with national standard-setting bodies during all stages of the development of IFRSs. To foster the exchange between national and regional standard-setting bodies and the IASB,