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Journal of Finance and Accountancy

Preparing for international financial reporting standards
Amanda Paul
Troy University
Eddy Burks
Troy University
ABSTRACT
The accounting profession is on the precipice of one of the biggest changes to face it since the 1930s. In the very near future, there is a strong possibility that United States generally accepted accounting principles (GAAP), as it is known today, will cease to exist. In its place will be a global standard encompassed by the International Financial Reporting Standards
(IFRS). This paper will provide a history of IFRS and discuss the timeline of convergence, along with advantages and disadvantages. This paper will also address the future impact on accounting education. Keywords: IFRS, history, timeline, advantages, disadvantages, classroom impact

Preparing for international, Page 1

A HISTORY OF IFRS
In 1973, an organization known as the International Accounting Standards Committee
(IASC) was formed to address the need for standards that could be used by smaller nations in creating their own accounting standards. This group was succeeded by the International
Accounting Standards Board (IASB) in 2001. The IASB is based in London and is the private sector standard setting body for non-government and not-for-profit entities. All fifteen members are selected based on technical skills and background from many different countries. At this time, four of the members are American. Two of the sitting members are always part-time. The
IASB is primarily funded by fundraising activities. One of the challenges facing the conversion to IFRS is ensuring that the IASB has a stable source of funds for the future. The primary purpose of the IASB is to promulgate IFRS. The governance structure is very similar to the
Financial Accounting Standards Board (FASB) in the United States. The IASB reports directly to the IASC Foundation. The sitting IASB Chair is Sir David Tweedie and the sitting IASC


References: AICPA’s International Financial Reporting Standards (IFRS): An AICPA Backgrounder. (n.d.) Retrieved December 11, 2008 from (n.d.) Retrieved December 9, 2008 from http://www.ifrs.com/states_society.html AICPA’s IFRS Preparedness Survey Results Cole, M. (November 25, 2008). Only a third of U.S. companies have prepped for IFRS. Retrieved December 9, 2008 from http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081125/REG/811259964/1 Under New SEC Timeline. Retrieved April 27, 2010 from http://www.journalofaccountancy.com/Web/20102656.htm Flynn, T. (September 4, 2008). US warming to IFRS as it moves on from GAAP. Retrieved December 9, 2008 from http://www.ft.com/cms/s/0/e944709e-7a19-11dd-bb93000077b07658.html?nclick_check=1 Retrieved December 16, 2008 from http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081119/REG/811199989/1 December 11, 2008 from http://www.cfo.com/article.cfm/12625999?f=alerts Nilsen, K accounting education. Retrieved December 9, 2008 from http://www.journalofaccountancy.com/Issues/2008/Dec/OnTheVergeOfAnAcademicRev Accountancy. Retrieved December 9, 2008 from http://www.journalofaccountancy.com/Web/RoadMapforTransitiontoIFRSAvailable.htm (September 4, 2008). Retrieved December 11, 2008 from http://www.examiner.com/p221440~University_Professors_Weigh_in_on_Building_IFRS_Into_Curricula__Small_N umber_of_Universities_Will_be_Ready_for_2008_2009_Academic_Year__According_t
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