Global Accounting Convergence and the Potential Adoption of IFRS by the United States
Global Accounting Convergence and the Potential Adoption of IFRS by the United States

Author: Luzi Hail

Publisher:

Published: 2011

Total Pages: 104

ISBN-13:

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Drawing on the academic literature in accounting, finance and economics, we analyze economic and policy factors related to the potential adoption of International Financial Reporting Standards (IFRS) in the U.S. We highlight the unique institutional features of U.S. markets to assess the potential impact of IFRS adoption on the quality and comparability of U.S. reporting practices, the ensuing capital market effects, and the potential costs of switching from U.S. GAAP to IFRS. We discuss the compatibility of IFRS with the current U.S. regulatory and legal environment as well as the possible effects of IFRS adoption on the U.S. economy as a whole. We also consider how a switch to IFRS may affect worldwide competition among accounting standards and standard setters, and discuss the political ramifications of such a decision on the standard setting process and on the governance structure of the International Accounting Standards Board. Our analysis shows that the decision to adopt IFRS mainly involves a cost-benefit tradeoff between (1) recurring, albeit modest, comparability benefits for investors, (2) recurring future cost savings that will largely accrue to multinational companies, and (3) one-time transition costs borne by all firms and the U.S. economy as a whole, including those from adjustments to U.S. institutions. We conclude by outlining several possible scenarios for the future of U.S. accounting standards, ranging from maintaining U.S. GAAP, letting firms decide whether and when to adopt IFRS, to the creation of a competing U.S. GAAP-based set of global accounting standards that could serve as an alternative to IFRS.

Global Accounting Convergence
Global Accounting Convergence

Author: Ross Lallian

Publisher:

Published: 2010

Total Pages: 98

ISBN-13:

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The International Accounting Standards Board (IASB) has developed the International Financial Reporting Standards (IFRS) as a single set of global accounting guidelines. As the world's economy has become increasingly connected, the need for a single set of global accounting guidelines has become necessary. The United States has stated interest in adopting IFRS, although, at this time the United States has not adopted IFRS. This project reviews prior articles on the topic of global accounting convergence. Also, this project examines the Stock and Exchange Commission's (SEC) research on the United States role on global accounting convergence. The conclusion reached is that the United States should adopt IFRS. A single set of accounting guidelines provides greater transparency and consistent information for users of financial statements.

Achieving Global Convergence of Financial Reporting Standards
Achieving Global Convergence of Financial Reporting Standards

Author: Christopher Patel

Publisher: Emerald Group Publishing

Published: 2011-12-15

Total Pages: 177

ISBN-13: 1780524420

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This research monograph examines whether International Financial Reporting Standards (IFRS) are interpreted and applied in a consistent manner within and across countries, and questions the implicit assumption that accounting convergence will automatically lead to comparability in financial reporting.

Does Mandatory Adoption of IFRS Enhance Earnings Quality? Evidence from Closer to Home
Does Mandatory Adoption of IFRS Enhance Earnings Quality? Evidence from Closer to Home

Author: Gopal V. Krishnan

Publisher:

Published: 2018

Total Pages: 54

ISBN-13:

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The global accounting convergence and the potential adoption of International Financial Reporting Standards (IFRS) by the U.S. is a timely topic. We contribute to the literature by examining a more recent mandatory IFRS adoption by U.S.'s largest trading partner, Canada. Canadian GAAP (CGAAP) are considered a close substitute for U.S. GAAP. One key feature of this setting is that two earnings numbers are available for fiscal year 2010 since Canadian firms were required to reconcile earnings under CGAAP with earnings under IFRS. We run a “horse race” of earnings quality between earnings under CGAAP and IFRS. We find that on average, relative to IFRS-earnings, earnings under CGAAP has greater association with next period cash flows and higher persistence. Further, when the difference between earnings under CGAAP and IFRS is large, IFRS-earnings is less value-relevant and less persistent. In short, the results strongly support the notion that higher earnings quality is associated with CGAAP. Finally, our results indicate that differences between CGAAP and IFRS with regard to accounting for financial instruments and investments significantly impair the quality of IFRS-earnings. Our findings are potentially informative to current policy debates on the possible use of IFRS by U.S. firms.

Convergence of IFRS and US GAAP
Convergence of IFRS and US GAAP

Author: Malieka Farah Deeba Malik

Publisher: LAP Lambert Academic Publishing

Published: 2011-01

Total Pages: 72

ISBN-13: 9783843388603

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The main idea behind this paper is to highlight the background and current movements of International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) toward convergence of International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP). Subsequent to introductory chapter the second chapter discusses the historical perspectives describing the various events that shaped the IASB and FASB current efforts towards convergence of IFRS and US GAAP. The third chapter describes the strategies policies and procedures adopted by the IASB/FASB to achieve the goal for international accounting convergence. The focus is on the maintainability of investors' interest and integrity of capital markets that can only be achieved by observing methods required for high quality accounting standards. Fourth chapter identifies the substantive differences and similarities between IFRS and US GAAP and catalogue those differences in which a specific accounting treatment is permissible under one basis of accounting standards but not permissible under the other.

Transparency in Financial Reporting
Transparency in Financial Reporting

Author: Ruth Ann McEwen

Publisher: Harriman House Limited

Published: 2009-07-31

Total Pages: 154

ISBN-13: 0857190229

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By January 2012 all major economies, apart from the US, will provide financial reports using International Financial Reporting Standards (IFRS). This book sets out the key differences between IFRS and US GAAP from a practitioner's perspective, although financial analysts will also benefit from the material presented. The financial crisis has been attributed to, among other things, a perceived lack of transparency in the financial markets. In general, transparency implies an ability to see the reported results of an entity's financial activities clearly and to use these results in making investment decisions. At question is the belief that transparency in financial reporting will lead to transparency in financial markets. Unfortunately, this link may be more subjective than most of us wish. Ruth Ann McEwen presents an analysis of reporting issues affecting transparency under IFRS, compared with US GAAP, and suggests areas of concern for preparers and users of financial reports. Providing an invaluable guide for all accountancy professionals, the book also contains a technical analysis of major accounting issues raised by convergence, and indicates areas of interest during initial adoption of IFRS by US entities. This authoritative book provides all the essential information required for advanced practitioners and analysts at this critical juncture.

Worldwide Financial Reporting
Worldwide Financial Reporting

Author: George J. Benston

Publisher: Oxford University Press

Published: 2006-04-13

Total Pages: 336

ISBN-13: 019029423X

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International accounting standards tend to converge, as do auditing, enforcement and corporate governance, whereas trading of equity shares remains essentially national. The book provides a thorough analysis of what information investors really need, how financial accounting systems developed and their current requirements in major commercial countries, and examines current issues, particularly the benefits and costs a single or multiple accounting standards, the bases for accounting standards, and limitations to accounting disclosure in financial statements.

The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting
The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting

Author: Francesco Bellandi

Publisher: John Wiley & Sons

Published: 2012-05-07

Total Pages: 847

ISBN-13: 0470977124

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An indispensable guide to making the transition to dual IFRS/GAAP financial reporting U.S. financial reporting will undergo an unprecedented level of change within the next several years. U.S. companies face a convergence between U.S. GAAP and IFRS, affecting several major accounting standards—most notably in the areas of leasing, revenue recognition, and financial instruments. It is imperative that U.S. companies understand these major changes and their business and operational implications. The IFRS U.S. GAAP Dual Reporting Handbook to First-Time Adoption offers a comprehensive treatment of both the principles and techniques of dual reporting under IFRS/U.S. GAAP, while exploring the practical implications for accounting professionals of reporting under both sets of standards. Takes an operating approach to the implementation and application of the dual standards Draws upon the author's extensive firsthand experience to dispel uncertainty and offer decision makers expert technical assistance Defines systemic changes businesses will need to make to accommodate IFRS standards Compares the two bodies of standards item-by-item and identifies solutions under one set of standards to issues arising under the other Explores the strategic impact of structuring a company for IFRS transition In addition to covering the full range of critical issues surrounding adopting IFRS, this indispensable handbook is a rich resource of dual reporting tools, including financial statement formats, charts of accounts, accounting check-lists, reconciliation schedules, and operating manuals.

The Relevance of International Financial Reporting Standards (IFRS) to a Developing Country
The Relevance of International Financial Reporting Standards (IFRS) to a Developing Country

Author: Duc Phan

Publisher:

Published: 2014

Total Pages: 15

ISBN-13:

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This paper adopts the concept of accounting ecology proposed by Gernon and Wallace (1995) in examining the accounting environment of Vietnam to identify some of the factors that might explain the lack of support for International Financial Reporting Standards (IFRS) in that country. Drawing on the literature of international accounting convergence models, the author assesses the potential impact of IFRS adoption on the quality and comparability of Vietnam reporting practices, the capital market effects and the potential costs of switching from Vietnamese General Accepted Accounting Principles (VN GAAP) to full adoption of IFRS. The paper also highlights some of the important factors that are likely to influence the progress of the implementation of IFRS in Vietnam. The paper concludes with a discussion of scenarios for future evolution of accounting standards in Vietnam in the light of the current global movement toward implementation of IFRS.