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MODONNELL IFRS Conversion Challenges WEEK 2 ACG5135

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MODONNELL IFRS Conversion Challenges WEEK 2 ACG5135
IFRS Conversion Challenges
Meghan O’Donnell January 18, 2015 ACG5135

The adoption or convergence of United States Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS) has been quite an arduous journey for all parties involved. Although the two possibilities are very different, one thing is certain; IFRS is coming to America. Accounting professionals have been resistant to an adoption, but most agree there must be a single set of high functioning standards for the world business market. The issuance of the highly anticipated IFRS No 9 affects not only foreign accounting firms, but US Certified Public Accountants (CPAs) as well, due to globalization. The talk of convergence between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) has been ongoing since 2002. Since 2002 there have been objections by accounting professionals opposing the convergence. At this point, the naysayers seem to be victorious. The total adoption of IFRS by the United States has been shelved for the time being, but here is still a responsibility for US CPAs to keep abreast with IFRS updates. This is “based on a proposed timetable the U.S. Securities & Exchange Commission (SEC) developed, acceptance of IFRS in the U.S. could come as early as 2015, so understanding the standards is critically important to management accountants, auditors, financial analysts, corporate executives, and others involved with financial reporting.” (Smith, 2012)
There are just too many core differences between the two standards at this point for a full adoption of IFRS. Traditionally IFRS is known as a principle based set of standards and US GAAP is rule based. Even with the differences, the two Boards have made leaps and bounds towards a convergence over the last ten plus years. The IFRS has been closely consulting with

the FASB to create one set


References: IFRS No 9. Retrieved from: http://www.ifrs.org/Current-Projects/IASB-Projects/Financial-Instruments-A-Replacement-of-IAS-39-Financial-Instruments-Recognitio/Pages/Financial-Instruments-Replacement-of-IAS-39.aspx Smith, L. M. (2012). IFRS and U.S. GAAP: Some key differences accountants should know. Management Accounting Quarterly, 14(1), 19-26. Retrieved from http://search.proquest.com/docview/1318923526?accountid=35796 Topazio, N. (2010). REPORTING STANDARDS. Financial Management, , 28-30. Retrieved from http://search.proquest.com/docview/195676290?accountid=35796
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