Ifrs International Financial Reporting Standards

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Submitted By mokutatsu
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International Financial Reporting Standards vs. Generally Accepted Accounting Principals
Over the last decade, the world has become increasingly connected. Businesses are embracing opportunities abroad and gathering investors from a progressively growing international market. Globalization has given rise to a number of questions regarding multicultural business practice. It has also created a need for universal financial reporting that is consistent and useful to all of its users, international and domestic alike. Due to this growing concern, the International Accounting Standards Board was established and has created a code of standards to facilitate such financial reporting.
IFRS is an acronym for International Financial Reporting Standards. IFRS are a set of accounting standards that will establish a uniform financial statement accounting standard across the world (AICPA, “What is IFRS”). These standards will create a consistency among financial statements, and will allow external uses better comparability from one entity to another, regardless of the entity’s country of origin. IFRS was developed by the International Accounting Standards Board, IASB, a London based organization established in 2001. The AICPA was a founder member of this board, and, while not in direct affiliation thereof, has established a website to educate individuals and businesses on IFRS (AICPA, “What is the IASB”).
The cost of the United States converting to IFRS is under scrutiny, many believe the benefits would be less than the actual costs. In the short-run, the initial costs may indeed outweigh the benefits; however, in the long-run the benefits will surpass the initial expenditure. Benefits of convergence include cost reduction, ease of access, increased consistency and comparability, as well as the creation of new business opportunities.
Converging with IFRS may lead to a…...

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