Implementing International Financial Reporting Standards

The first benefit of the conversion is comparability. Switching to IFRS would allow people to see various companies from different parts of world on the same plane. As willingness to trade increases, cross-border investment and integration of capital markets are easier with greater market liquidity and lower cost of capital. Investor bases would increase as the financial reports are becoming comparable. With better information, companies would be able to more effectively allocate their capital. Having one standard, however, does not guarantee comparability. With the same standard, practices and enforcement can differ considerably across firms and countries.

The International Accounting Standards Board (IASB) was formed in an attempt to bring uniform accounting standards within international countries through its issuing of the International Financial Reporting Standards (IFRS). Today, over 100 countries including Canada, India, and Japan have adopted these standards for financial reporting. The growth of multinational companies such as Coca Cola and the increasing desire of cross-border investing have made it apparent that the U.S.accounting standards known as the Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB) can no longer remain separate from IFRS. Under the request of the Securities and

There is no universal GAAP standard and the specific vary from one geographic location or industry to another. In the United States, the Securities and Exchange Commission (SEC) mandates that financial reports adhere to GAAP requirements. The financial accounting standards Board (FASB) stipulates GAAP overall and the Governmental accounting standards Board (GAAP) stipulates GAAP for state and local government. Publicly traded companies must comply with both SEC and GAAP requirements. In recent years it also has had the chance to look at the United States Generally Accepted Accounting Principles (GAAP) and modify the rules to enhance clarity and consistency, intentionally setting itself apart from U.S. GAAP. The convergence of these two accounting frameworks is a must for both foreign and domestic businesses. The International Financial Reporting Standards (IFRS) is the accounting framework used by the European Union, Japan, Canada, and other world economic leaders. Companies need an accurate and reliable financial accounting systems not matter if globally or in the United

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

Over a decade ago, it was believed that the whole world would likely adopt the Generally Accepted Accounting Principles (GAAP). At the point in time, the International Financial reporting Standards (IFRS) was only about ten years old. In the last decade, the IFRS has been adopted in many growing countries. Currently, it is anticipated that the U.S. will converge its GAAP with the international IFRS, leaving behind only a modified IFRS. This may occur as early as 2014.

Before delving into the arguments against IFRS adoption, it is important to note that the U.S. economy and institutional framework have many idiosyncrasies. Hence, even if switching to IFRS proved beneficial for some countries, it would not necessarily be the same for the United States. To start, the United States possesses the largest economy in the world, and its public equity market accounts for a third of global market

On November 18, 2002 the FASB and IASB came together at a meeting in Norwalk, Connecticut to start the wheels in motion for the purpose of establishing a new set of financial standards. The FASB and IASB are committed to create financial standards that will be accepted both domestically and internationally that are of high quality and compatible for financial reporting. At present more than a 100 countries already use the International Financial Reporting Standards. The U.S. at present has not accepted a changed in accounting procedures; therefore, this is going to be a major task for both the FASB and IASB to complete successfully this union. I do believe that the partnership between the FASB and IASB will achieve the goals of creating a common financial reporting set of standards that will be accepted by all.

Additionally, there will be a need for a global security force to apprehend offenders of the new standards. This could be a controversial problem in itself. The main issue, is to establish the standards first and get every public trading company to buy in on the idea of implementing the standards. Currently, many countries have agreed to adhere to the international standards. As more countries are adopting the IFRS, the U.S. has yet to agree to the standards. Even though the GAAP and IFRS resembles closely, there are still some issues to be worked out (Street, 2012). Eventually the U.S. will agree to the terms of the IFRS, once all the terms and conditions are in balance (Zeff,

The International Accounting Standards Board (IASB) and the Financial Standards Accounting Board (FASB) in the United States are working towards convergence between US GAAP and the IFRS, which are the two major accounting standards in the world. Most of the other nations in the world with their own accounting standards are also working towards convergence. The process has been ongoing for several years, and the organizations involved issue updates periodically in order to ensure that both the accounting profession and the general public are aware of the state of the convergence process.

Pace University | ACC 649 Contemporary Accounting Issues FALL 2016 | 70159 | Instructor: Dr. Kwang-Hyun Chung Research Proposal: Will the transition from U. S. GAAP to IFRS only have an effect on Financial Reporting? Abstract: The purpose of this research is to analyze if the transition from Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS) in the United States only has an effect on financial reporting. Throughout this paper, I will explain the advantages and disadvantages of adopting IFRS. Also, I will also identify the differences between both standards and how it affects other aspects of a company’s business operations. In essence, reporting under IFRS has its pros and cons but it is ultimately up to the Securities and Exchange Committee to fully implement what standard they want to U.S businesses to follow. Prepared by: Sharon Williams Introduction Over the last several years, the controversy of the United States adopting International Financial Reporting Standards (IFRS) has been a significant issue for many businesses who are pro Generally Accepted Accounting Principles (GAAP). Although U.S GAAP has been the common accounting principles for many countries, specifically the US, now countries are adopting IFRS. In addition, there are many organizations such as European Union (EU) and International Accounting Standards Committee (IASC), who want domestic and international businesses to have one

The Financial Accounting Standards Board (FASB) established the United States’ Generally Accepted Accounting Principles (GAAP) which have been used in US corporations for over 75 years. The purpose of having these principles allows financial statements from businesses to be compared truthfully and professionally. It also serves as a standard for accountants to follow. There is talk of the United States no longer following the principles of GAAP and adopting the International Financial Reporting Standards (IFRS). By adapting to the international standards there will be a better opportunity for continuity between businesses in foreign countries and the United States. GAAP only pertains to the United States’ financial

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

In today’s business, markets are demanding increasing conformity. Many countries have converted to and implemented the International Accounting Standards Board (IASB)’s accounting standards. The United States, however, still maintains its own Financial Accounting Standards Board (FASB). Both IASB and FASB have created International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (U.S.GAAP) respectively. These accounting standards are rules of measurements for financial statements that companies issuing stock to the public must provide

Acceptance of IFRS also helps to enhance the comparability of financial statements, making it easier for large international corporates’ subsidiaries located in different countries to compare their financial statements with each other, achieving cost efficiency and time saving in management. (Small Business - Chron.com, 2015). Besides that, adoption of IFRS may help to remove the trading barrier that let the companies to access to the international capital markets and investments easier (Jordan, 2013), (Small Business - Chron.com, 2015). In summary, standardisation of accounting standards will increase the quality of information, eventually, eventually will help the investors to make better investing decision (Jordan, 2013).

By eliminating many international differences in accounting standards, IFRS eliminate many of the adjustments people have made in order to make companies’ financials more comparable internationally. The adoption of IFRS reduced the cost for investors to process financial information. The gain would be extremely important for institutions that create large financial database. (International Accounting Policy Forum, 2006).