TWO SIDES OF THE STORY
Growing interest in the global acceptance of a single set of robust accounting standards comes from all participants in the capital markets. Many multinational companies and national regulators and users support it because they believe that the use of common standards in the preparation of public company financial statements will make it easier to compare the financial results of reporting entities from different countries. They believe it will help investors understand opportunities better. Large public companies with subsidiaries in multiple jurisdictions would be able to use one accounting language company-wide and present their financial statements in the same language as their competitors. Another benefit some believe is that in a truly global economy, financial professionals including CPAs will be more mobile, and companies will more easily be able to respond to the human capital needs of their subsidiaries around the world. Nevertheless, many people also believe that U.S. GAAP is the gold standard, and something will be lost with full acceptance of IFRS. What’s more, it is unlikely that all U.S. issuers will voluntarily elect to use IFRS. According to a survey conducted in 2007 by Deloitte & Touche of companies ranging in annual revenue size from $100 million to $10 billion, only about 20 percent of CFOs say they would adopt IFRS if given a choice. U.S. issuers without significant customers or operations outside the United States may not have a market incentive to prepare IFRS financial statements. Other U.S. issuers may use their financial statements as the basis for filings with other regulators and authorities that may require U.S. GAAP. Another concern is that worldwide, many countries that claim to be converging to international standards may never get to 100 percent compliance. Most reserve the right to carve out selectively or modify standards they do not consider in their national interest, an action that could lead to incomparability - the very issue that IFRS seek to address. View International Financial Reporting Standards (IFRS) — An AICPA Backgrounder [PDF - 500k]
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