Ifrs Adoption in the Us - White Paper

1463 WordsMar 28, 20126 Pages
Adoption of IFRS in U.S. Companies – The Sooner, the Better Introduction Source: http://us.kpmg.com/jnet/English/Archives/2009/Issue1/images/map_en.gif IFRS Implementation Around the World (2008) Over 120 countries around the world already permit or even require public companies to use the new International Financial Accounting Standards IFRS. Among them are the EU, China, Russia, and Brazil. Canada and Korea are expected to adopt IFRS by 2012; Mexico will require all listed companies to adopt IFRS in 2012 (http://www.ifrs.com/ifrs_faqs.html#q1). The U.S., despite a strong initial reluctance to adopt the new standards, are currently working toward a convergence of U.S. GAAP and IFRS. The SEC recently approved 2015 as the earliest…show more content…
U.S. companies would have to adopt IFRS’ way of valuing assets and liabilities just to remain competitive without understating for example their total assets (http://www.aleablog.com/ifrs-vs-us-gaap-european-banks-leverage-overstated-picture/). Source: http://www.ifrs.com/updates/aicpa/Backgrounder_pdf.html A set of internationally recognized accounting standards facilitates capital flows across borders. Globally accepted standards make financial information readily comparable for its users. Foreign investors are more inclined to put money into a U.S. company if they are familiar with the company’s financial reporting. Conversely, U.S. investors will find it easier and less risky to invest in foreign companies when they know the local accounting standards (Epstein 2009). This will make U.S. companies and capital markets more competitive, since it saves costly reconcilition of different standards. Preparers, investors, auditors, and others will benefit from these cost effieciencies, since a Results of an IFAC Survey among accounting leaders around the world with respect to the importance of convergence to International Financial Reporting Standards for economic growth in their countries: 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
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