Ifrs Of The Us And The World : Political And Economic Forces Shape Accounting

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IFRS in the US and the World
Political and economic forces shape accounting. The increased worldwide integration of politics and markets raises the necessity for integration of financial reporting standards. The integration is driven by the reductions in the costs of information processing and communication. International Financial Reporting Standards are a common business affair language in the globe for easier comprehension and comparison of company accounts across international boundaries (AICPA). The standards are issued by the International Accounting Standards Board. The IASB is a United Kingdom body that was established in 2001 and is based in London. The historical cost paradigm authorizes the IFRS except IAS 29 and AFRIC 7, which
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Most of the economic allies of the US have moved to IFRS, and it has become a major challenge for both the trading partners and internal companies.
GAAP and IFRS are significantly different in various ways. GAAP is based on rules and prefers a risk-and-reward model. On the other hand, IFRS is based on standards and prefers a control model. The meaning of this is that GAAP makes decisions as a result of literature and research. IFRS, on the other hand, makes the decisions based on patterns that lead to the formation of facts. Categorization costs are considered as capitalized in IFRS and as expenses in the GAAP. There are also significant differences in the valuation of assets, revenue recognition, assessment of impairment of long-lived assets, correction of errors and financial statement presentations (Epsten and Eva 40-60). However, they are both sets of complete financial statements that require the companies to use the same policies and principles of accounting.
The Securities and Exchange Commission has time and again stated its commitment to shift from GAAP without any forthcoming efforts (Street 258). Despite the slow pace as compared to the other countries that are rapidly changing, the change has become apparent. The SEC allowed financial statements from foreign companies listed on the domestic stock exchanges with IFRS. However, the general approach of the United States to the matter has been of a cautious nature. The SEC adopted a
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