Advantages of Ifrs Adoption
Advantages of IFRS Adoption for the U.S. Investors
1. Introduction The adoption of IFRS would have many benefits to the United States investors for it would improve standardize the reporting formats, financial reporting quality, and provide more accurate, comprehensive and timely financial statement information. By far, many countries have already adopted IFRS, so the United States would benefit greatly by conforming to global IFRS network. In this paper, I will analyze reasons that the adoption of IFRS would benefit the U.S. investors in terms of improvement of reporting quality and comparability. Next section describes the history and background of IFRS. In the third section, I discuss the arguments among people of internationally uniform accounting standards. In the fourth section, I compare the accounting differences between U.S. GAAP and IFRS. In the fifth section, I explain the advantages of accounting convergence for U.S. investors in depth. In the sixth section, I discuss certain potential IFRS implementation issues and its effect on investors. At last, I conclude the whole paper.
2. The background of IFRS International Financial Reporting Standards (IFRS) are accounting standards, interpretations and the framework adopted by the International Accounting Standards Board (IASB). Part of IFRS are known by International Accounting Standards (IAS). IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). In April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. The IASB has continued to develop standards calling the new standards IFRS. As of 2009, 100 countries around the world have adopted IFRS. In 2005, the European Union (EU) began requiring its member country companies incorporated whose securities are listed on an EU-regulated stock exchange to prepare their consolidated financial statements in accordance with
1. Introduction The adoption of IFRS would have many benefits to the United States investors for it would improve standardize the reporting formats, financial reporting quality, and provide more accurate, comprehensive and timely financial statement information. By far, many countries have already adopted IFRS, so the United States would benefit greatly by conforming to global IFRS network. In this paper, I will analyze reasons that the adoption of IFRS would benefit the U.S. investors in terms of improvement of reporting quality and comparability. Next section describes the history and background of IFRS. In the third section, I discuss the arguments among people of internationally uniform accounting standards. In the fourth section, I compare the accounting differences between U.S. GAAP and IFRS. In the fifth section, I explain the advantages of accounting convergence for U.S. investors in depth. In the sixth section, I discuss certain potential IFRS implementation issues and its effect on investors. At last, I conclude the whole paper.
2. The background of IFRS International Financial Reporting Standards (IFRS) are accounting standards, interpretations and the framework adopted by the International Accounting Standards Board (IASB). Part of IFRS are known by International Accounting Standards (IAS). IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). In April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. The IASB has continued to develop standards calling the new standards IFRS. As of 2009, 100 countries around the world have adopted IFRS. In 2005, the European Union (EU) began requiring its member country companies incorporated whose securities are listed on an EU-regulated stock exchange to prepare their consolidated financial statements in accordance with
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