Ifrs Journal Article Review

796 WordsFeb 18, 20134 Pages
Advanced Accounting Writing Assignment 2/13/2013 What have IASB and FASB convergence efforts achieved? The accounting world began to shake up in 2000 when the International Organization of Securities Commissions (IOSCO) endorsed IFRS for cross border security sales. Shortly after this, the International Accounting Standards Board came to existence in 2001 and set forth a plan of action to spread IFRS worldwide. The next year IFRS became a relevant force in the accounting world after the European Union required all companies trading on the European exchange to conform to the international standards by 2005. While IFRS has had success internationally it has struggled to become the source for accounting guidance in the United States. Paul Volcker, the first chairman of the IFRS Foundation, made his objection to using US GAAP worldwide, but instead aimed to work with the standard setters of the United States toward conquering the accounting challenges in a uniform manner. Volcker’s vision for a universal set of accounting standards made headway when the Norwalk Agreement was signed by both the IASB and FASB in a goal to “ make their existing financial reporting standards fully compatible as soon as possible and to coordinate their future work programs to ensure once achieved, compatibility is maintained.” It is important to take note that compatibility does not necessarily mean identical standards, but rather that compliance with one set of standards would also result in compliance with the other. The boards have since been working on taking two sets of standards and adding, modifying, and updating them in attempt to reach the final goal of unification. Now, ten years after both boards agreed to coordinate and attempt to converge standards the best word to describe the progress is varied. Some projects have successfully aligned the two standards while other

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