The Switch to IFRS - Brazil
Keller Graduate School of Management
Mr. Hussain Kabani
November 6, 2014
Brazil is one of the many companies that have switched to the IFRS accounting standards. Due to a significant turn-around in their economy over the last 16 years, the country decided to move from a domestic reporting system to a global financial reporting system. Since they had become economically stable and were regarded as a strong democratic country, they felt this movement was best. (Bruce, 2010) The goal of the country was to have all listed companies using IFRS by 2010.
Brazil started its process in 2000 to replace GAAP with IFRS as the country’s accounting method. ("IFRS: Changes in," 2010) Eight years later, they were finally able to conquer all the congressional hurdles and the IFRS accounting standard was put into law on January 1st, 2008. By the end of 2010, all publicly listed companies were converged to IFRS ("IFRS application around," 06). Getting past congressional hurdles was very time consuming. Once they conquered that obstacle, companies began the conversion to IFRS. This was a much quicker process and within a few years all listed companies had converged. ("IFRS: Changes in," 2010). To date all companies listed in Brazil have adopted IFRS. Brazil felt that moving to IFRS would be a huge benefit in international capital markets. They believe that having high quality standards is one of the key factors in efficiently allocating scarce resources. (IFRS.org/news) Having comparable financial information makes the companies more attractive to investors and has a significant effect on their financial decisions. (IFRS.org/news) The country was now looked at as strong, stable and secure and to have the companies reporting comparable financial information would continue to increase this view. When first hearing of adopting IFRS in the US, my first instinct was to resist. After...
References: Should the U.S. adopt IFRS? (n.d.). Retrieved November 7, 2014.
Ifrs application around the world. (06, 2013 05). Retrieved from http://www.ifrs.org/Use-around-the-world/Documents/Jurisdiction-profiles/Brazil-IFRS-Profile.pdf
("Ifrs application around," 06)
Bruce, R. (2010, March 18). Spotlight on brazil’s plans to adopt ifrss. Retrieved from http://www.ifrs.org/news/features/Pages/spotlight-on-brazil’s-plans-to-adopt-ifrss.aspx
(2010). Ifrs: Changes in the brazil statutory reporting environment . Deloitte, Retrieved from http://www.iasplus.com/en/binary/americas/1005brazilifrs.pdf
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