Concerns in the adoption of IFRS to replace GAAP

Concerns in the adoption of IFRS to replace GAAP

Introduction

Replacing GAAP with IFRS will culminate in years of effort to globally develop the highest accounting standard and to promote understanding of financial statements of businesses wherever they are situated. Ainternational accounting benchmark of the largest value evolved in collaboration with the US will be a win-win solution for investors be they in the US, Europe, Asia or in Africa as unified benchmark will forester the flow of capital across boundaries without the difficulty of endeavouring to realise what a economic declaration means. A global accounting standard will eliminate any loss of information due to reconciliation processes between US GAAP and IFRS which could have an impact on the true picture of the financial health of the company concerned.

Analysis

It will be a laudable thing to do by removing the reconciliation obligation and rather than adopt IFRS. Even though some anxieties may live the significant matters are “what is the supreme advantage to stakeholders. Wsick the adoption of IFRS advance describing of accounting information to investors, shareholders and other stakeholders? Will a globally uniformed accounting standards' endow all users to have get get access to to to the same accounting data to be able to do business any place in the world without any handicap? eventually will it reduce the charges, distortion and increase the unreliability of accounting data that could be faced when reconciling financial declarations arranged utilising other standards with the US GAAP? To this last inquiry, I say decisively yes because the effect of the minutest lost of data through the reconciliation process could have a important impact on the comprehending and utility of the financial statement[1].

The supreme advantage of a better globally acknowledged accounting standard is that data accessible to investors, economic analysts, shareholders and other stakeholders will enhance their conclusion making, advance economic administration, advance profitability of companies premier to development on a wider scale throughout the world. If it were true that the US GAAP is a better standard than the IFRS then why the economic world wouldn't be a better location if FASB connected hands with IASB to set a unified, globally acknowledged accounting standards. Looking at the expanding number of nations applying IFRS, one is tempted to believe that every country is in search of excellence and as such the current convergence task should be expedited even when the IFRS is taken up and the reconciliation requirement abolished.

Maintaining two groups of accounting benchmark - US GAAP for the USA and IFRS for the rest of the world would only alienate one assembly from the other as each tries to task itself as superior. As businesses trade after borders it is only careful that financial information developed any place should be appreciated everywhere without any barricade.

Addressing the convergence is concerned of SEC, it is my candid attitude that eradicating the reconciliation requirements should in no way stop the convergence ...