I don’t hear very much
discussion in the broader market about the International Financial Reporting
The SEC is leaning strongly in the direction of adopting IFRS for U.S. public companies, replacing the tradition accounting standards according to GAAP.
The adoption of IFRS
will have wide-ranging impacts on virtually every function in a public enterprise – accounting, tax, IT,
- The extraordinary economic/financial environment we find ourselves operating in. IFRS addresses many of the issues that have been cited as underlying causes of the current crises.
Reporting Standards (
More than 12,000 companies
in almost 100 nations have adopted
Many people believe that
By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier. Furthermore, companies with subsidiaries in countries that require or permit IFRS may be able to use one accounting language company-wide. Companies also may need to convert to IFRS if they are a subsidiary of a foreign company that must use IFRS, or if they have a foreign investor that must use IFRS. In addition, companies may benefit if they wish to raise capital abroad.
Until the SEC issues a rule allowing or requiringU.S.public companies to adopt IFRS, they must continue to prepare their financial statements under GAAP. Several large multinational corporations, such as Procter & Gamble, however, have started using IFRS for their foreign subsidiaries where allowed by local law. Also, some private companies owned by foreign companies are using IFRS to obtain financing in the U.S.