Us Adopting Ifrs Essay

1417 WordsFeb 6, 20136 Pages
The US adopting IFRS “The US adopting IFRS” is one of the hottest topics in US accounting because it aims to provide "a single set of high quality, global accounting standards that require transparent and comparable information in general purpose financial statements.". The growing acceptance of International Financial Reporting Standards (IFRS) as a basis for U.S. financial reporting represents a fundamental change for the U.S. accounting profession. Approximately 120 nations and reporting jurisdictions permit or require IFRS for domestic listed companies and approximately 90 countries have fully conformed with IFRS as promulgated by the IASB and include a statement acknowledging such conformity in audit reports. This has brought even more pressure on the US to adopt the IFRS. What is IFRS? International Financial Reporting Standards, or IFRS, is the collection of financial reporting standards developed by the International Accounting Standards Board (IASB), an independent, international standard setting organization. From 1973 to 2001, IAS were issued by the International Accounting Standards Committee (IASC). In April 2001 the International Accounting Standards Board (IASB) adopted all IAS and began developing new standards called IFRS. It is noteworthy that an IAS remains in effect unless replaced by an IFRS. The IFRS and the US GAAP have a couple of differences. For example, the LIFO (last-in, first-out) method of inventory is not allowed in the IFRS so firms that used LIFO in the past under U.S. GAAP will soon have to change their inventory method to FIFO (first-in, first-out). Also, the fixed assets of the firm (property and equipment) are reported at their initial cost less the accumulated depreciation. The firms can't do any upward adjustments of property and equipment under the US GAAP, whereas under IFRS they can. This can have a profound impact on a

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