Adoption of IFRS in U.S. Companies – The Sooner, the Better
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 date to require publicly traded companies in the U.S. to adopt IFRS (DeFelice 2010). This white paper points out the importance for listed companies in the U.S. to adopt IFRS as soon as possible, identifies potential problems, and states the benefits, before concluding on how to proceed. Background
The discussion of a global accounting standard started as early as 1966. Over the years, several committees worked on the development of a globally accepted standard until the emergence of IFRS in 2001. Some of the best elements of accounting systems were incorporated. The Financial Accounting Standards Board FASB, responsible for the development and administration of U.S. GAAP, and the International Accounting Standards Board IASB, responsible for IFRS, have been working together since 2002 to converge U.S. GAAP and IFRS (http://www.complianceweek.com/article/4413/the-inevitable-move-to-ifrs-getting-started). An internationally accepted set of accounting standards poses a tremendous advantage for multinational companies worldwide. Due to their international scope, these companies continuously face difficulties in complying with differing accounting standards and legal systems of the various countries they operate in. A globally...
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