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Will There Be One Set of Accounting Standards in Use Throughout the World in the Next Five Years?

In: Business and Management

Submitted By julelis24
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As business worldwide becomes more intertwined, countries are moving towards International Financial Reporting Standards, with the intention of having a universal accounting set of laws that will make analyzing each other’s industry easier and more reliable. International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB). Most certainly in a near future the world will be using one set of accounting rules. The eventual implementation of IFRS by all countries is expected to be market driven. Recently an associate of the S.E.C., Kathleen L. Casey, said in a speech that “the commission should move promptly to accept the international standards, investors would benefit from accounting standards that provide investors with highly comparable, decision-useful information about businesses without regard to their domicile” According to the IRS some of the advantages of adopting IFRS are the ability to compare statements using the same accounting language; comparison between companies will be easier; and companies could benefit if they want to raise funds offshore. The disadvantages in the other hand are U.S. GAAP is considered a model of excellence, therefore there is a fear that some quality will be lost in the case United States fully adopts IFRS, this system provides fewer detailed regulations than U.S. GAAP. IFRS also provides restricted industry-specific direction. Lastly there is a strong opinion that major expenses linked to adopting IFRS overshadow the benefits. At the moment we are going through what is considered the conversion period. Currently, both boards, IASB (International Accounting Standards Board) and FASB (Financial Accounting Standards Board) are working on merging these differences. There are companies that have already adopted IFRS. These companies report…...

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