Debate Continues About Whether or Not the U.S. Should Adopt IFRS
A Reuters’ article, “Analysis: Doubts Emerge Over U.S. Move to Global Accounting,” highlights the ongoing debate over whether or not the U.S. should move away from its Generally Accepted Accounting Principles (GAAP) standard of accounting reporting in favor of complete or partial adoption of the International Financial Reporting Standards (IFRS).
A number of executives cited in the article seem to lean on the side of not adopting the international accounting standards, and some argue that the GAAP is actually the better or more stringent of the two standards.
According to the article: “A bigger debate is whether the United States, or any country, should cede control over standard-setting and join a regime with no workable plan yet for uniform global enforcement.”
You can read more about the debate over the U.S. adoption of IFRS here.
The U.S. Securities and Exchange Commission (SEC) is slated to make a final decision on whether to adopt the whole or portions of IFRS by the end of the year.
Whether or not the SEC decides to adopt IFRS, in part or in whole, it is possible that GAAP will be altered in some way as a result of this debate to more closely match the international standards.
IFRS requires that a company’s balance sheet recognize all allowable assets and liabilities under IFRS reporting standards, re-classify items that were previously classified under GAAP, and apply IFRS standards when measuring the value of all assets, which requires a certified appraisal.
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By: Present Value
Additional Reading
SEC Releases Staff Paper on a Possible Incorporation of IFRS into U.S. GAAP