International Financial Reporting Standards (IFRS) is a group of accounting standards developed by the International Accounting Standards Board (IASB).
More than 12,000 companies in more than 100 countries have adopted IFRS and as a global standard the preparation of state-run financial statements across the globe. In the US, however, GAAP (General Accepted Accounting Principles) is applied. Recently, G20 leaders have been making significant progress towards a move towards a high standard of global accounting standards. President Obama called for a series of standards and made significant progress in 2009. The SEC is now devoting a new roadmap, which sets out a timetable and milestones for moving the United States to all US companies. Advantages and disadvantages of converting into IFRSs and various arguments against acceptance and adoption
Unified accounting standards provide comparability and enable companies operating in different parts of the world to apply the same standards. This will increase transparency, facilitating cross-border, higher-liquidity and low-cost investment. It also reduces the time and cost of preparing the financial statements in accordance with the different standards and regulations and saves enormous savings over the long term. Transitional cost is estimated to be $ 8 billion for the entire US economy, with an average cost of $ 3.24 million for multinational corporations. As the financial statements have dropped from three, they will save money in the long run. Adoption of IFRSs and the application of standard accounting standards eliminate the various accounting results of applying different standards and help investors differentiate between different strategies, including global investment. Many companies will soon have to count on more accounting standards if the US does not accept or do not adopt IFRS. Maintaining multiple standard reporting only increases accounting and auditing costs and does not represent any value for any country. More than 100 countries have adopted and are in the process of adopting IFRS. Delaying the adoption of IFRSs by Member States for multinational corporations can report their primary reporting in IFRS, resulting in parallel reports in US GAAP
. This may result in additional audit fees and possible errors. The US must move to IFRSs urgently. As more and more countries adopt IFRSs, US interests are applied to the same accounting standards. Most US companies prefer a group of accounting standards as they are multinational corporations and worldwide. IFRS simplifies the monitoring and control of its subsidiaries abroad and saves cost savings while maintaining accounting standards. It can help to overcome possible financial misunderstandings and simplify investment decisions. Because of moral norms, intolerance of unethical behavior, the United States has been world leader for centuries. Financial and accounting standards are used by other countries as a milestone to measure their economic and financial success until recently. You have to be the leader and the driving force in developing and adopting international standards. It is time for us to participate and play an important role in the development of international standards. Otherwise it will hurt you in the long run. Competition works and is a good thing because it provides better quality and lower price. Competition between different standards has the advantage of obtaining better information. In fact, no size matches all standards. A unified accounting standard can suppress innovation, ingenuity, competition, creativity, and entrepreneurship in capitalism. The differences between GAAP and other countries' standards can be very useful and can provide insight into the causes and values for which financial reporting is performed in a certain way. Focusing on the differences, we can profit from increased productivity, better quality technological innovation, and better match market needs. The transition to the IFSB will result in the IASB's monopoly status, which could jeopardize the quality of IASB standards. According to a recent survey, to convert to IFRS, US companies have to pay more than their European counterparts. Comparability and the Benefits of Extending the Implementation of the IFRS do not justify the takeover
According to SEC, 12% of revenues will enforce standards across the country, which means costs may even billions of dollars. The cost of achieving further comparability is not worth billions of dollars. It is decreasing in our slowly regenerating economy. From a cost-benefit point of view, convergence is obviously better than adopting. The transition to IFRS may be a challenge. The US economy is the largest in the world and no one knows exactly the scope and magnitude of the IFRS for such a large economy. IFRS has not been tested in countries such as the United States. On the other hand, US GAAP has evolved in a number of changes in the United States and sets the stage for time, especially fraud such as Enron and Tyco International
. create some problems. While the United States is carrying out effective implementation, it is very difficult to implement strict implementation across Member States due to differences in the economic and political systems and financial reporting practices of the adopted nations. To sum up, adoption of IFRS will result in comparability, greater audit effectiveness, less misunderstanding of information and cost savings, as more and more economic activity is globalized. The flip side eliminates competition and encourages innovation. Quality suffers because compromises need to be made to reach consensus due to the different political pressures and economic interests. However, there is much support for joining a single global accounting standard and believe that the US eventually has IFRS or IFRS and US GAAP at the same time