This research is based on the successful integration of IFRS into the different accounting boards and standard. The research enlightened the significant impact of the IFRS in the accounting standards. The research also discusses the integration of FASB and IASB with FIRS. Furthermore, there is a roadmap from SEC to have convergence with IFRS that is the major impact of IFRS implementation. The report will facilitate accounting professionals and students.
Table of Contents
The impact on financial accounting reporting by implementing IFRS3
IFRS vs. GAAP4
FASB and IASB Integration5
International Accounting Standards Board (IASB)5
Financial Accounting Standards Board (FASB)6
Challenges in IFRS7
Cost and Benefit8
SEC Proposes Roadmap for Using IFRS8
IFRS and GAAP
International Financial Reporting Standards is the combination of accounting standard. It states that how different types of the transaction and other accounting events should be reported in the financial statement. It is declared by the International Accounting Standards Board.
International Financial Reporting Standards (IFRS) aspires to bring the entire nations in the world under a similar set of global accounting standards that presents consistency, transparency, and compatibility in financial reporting system. According to a fact financial regulators in several countries have generated high demand for IFRS compliant financial statement (David, Christopher, 2008).
The International Financial Reporting Standard (IFRS) for Small and Medium size corporations published as an introductory plan by the IASB in 2007. This system introduced and designed for companies that have no public accountability. If the company's shares or debts listed and floated in the public exchange or financial institution company only then there would be Public Accountability. The IFRS for SME (IFSME) have capabilities to apply in the large range of private organizations (David, Christopher, 2008).
In 113 countries, more than 12,000 companies have implemented IFRS in some degree, and many other countries are enduring to implement the standards each year with the expectation of increased comparability of financial statement.
There are many reasons why companies are choosing to migrate from US GAAP and adopting IFRS. One of the most important reasons is due to globalization, as most countries have already made the switch over to IFRS (Alan, Susan, 2007). If companies in the US switched over to IFRS it would make transactions and deals with companies who operate under IFRS much easier. It would also give companies and stockholders in other countries a better economic indicator as to how companies here in the US are doing (Keith, 2007).
Another advantage with IFRS is clarity and productivity. Under IFRS, financial makers use their own professional judgment as to how to handle a specific transaction. This will lead to less time being spent trying to follow all the rules/complications that are coupled with rules-based accounting. It will also allow prepares financial information to keep statement in a simplistic and understandable forms for investors and other companies interested in saying company's financial statements (Keith, 2007).
A big disadvantage about companies in the US adopting IFRS is that current and future accountants will have to relearn how to do their jobs. This doesn't seem like much of a problem, but ...