IFRS or U.S. GAAP – Scenarios for the Future

In developing its comment letter to the SEC on its proposed roadmap, the Financial Accounting Standards Board used the report "Global Accounting Convergence and the Potential Adoption of IFRS by the United States: An Analysis of Economic and Policy Factors." The research was conducted by professors from Wharton, the University of Chicago and MIT's School of Management.

The research study outlines several scenarios for the evolution of financial reporting standards in the U.S. The report notes that the scenarios presented are neither exhaustive nor mutually exclusive. The scenarios include:

• Maintain U.S. GAAP with acceptance of IFRS from foreign firms
• Maintain U.S. GAAP with continued convergence between IFRS and U.S. GAAP
• Allow choice between IFRS and U.S. GAAP, but require reconciliation
• Allow unrestricted choice between IFRS and U.S. GAAP
• Adopt "U.S.- Specific IFRS"
• Set conditional timetable to fully Adopt IFRS
• Create international U.S. GAAP (I-GAAP)

The study does an excellent job summarizing tradeoffs between the scenarios. Based on comment letters received by the SEC on its roadmap, it appears many individuals and organizations support maintaining U.S. GAAP with continued convergence between IFRS and U.S. GAAP. Cooperation between the U.S. FASB and the IASB has led to improvements in both sets of standards. Continued convergence will result in even more improvements.

One concern about adoption of IFRS in the U.S. is that it would eliminate competition between standard setters and grant monopoly status to the IASB. The research study lists a number of potential problems this could create which includes lack of incentives to innovate and mounting political pressure as consensus must be reached across a wide range of political regimes and interests.

The discussion regarding creation of an international U.S. GAAP (I-GAAP) is very interesting. Under this scenario, the U.S. would develop a set of standards that would compete directly with IFRS. Whether this idea has legs is debatable.

The idea of allowing unrestricted choice between IFRS and U.S. GAAP - perhaps after a period of time to allow for more convergence of the standards - may have merit to some observers. Both standards are considered high-quality. Why not let market forces drive the decision? Doing so keeps competition alive between the standard setters and would result in a more orderly transition to IFRS for U.S. companies.

What do you think about the scenarios outlined in the study, the importance of competition between standard setters and the need to allow for more time for convergence?

- Paul Parks|www.IFRS.com

Comments

[Acai Berry]

Hi Friends,
Well I wanna thank you for sharing your information. Nice do keep us update with some more.

[Refurbished Laptops]

Every thing is directly proportional to technology. In this era technology is increasing a lot and exploring new methods in every field. A great post !!

[Text Loans]

The way things are going it seems that the US will go with IFRS reporting as if not it could result in confliction between the two reports. Things are set to change here in the UK too!

[Bill of Rights]

Move along with it as long as liberty and the free market is solid with your ideals.

[Home Business]

Competition is definitely good! I agree with the "Why not let the free market decide" post. Also, you don't want monopoly status to the IASB.

[neverfull]

I think that the US will definitely have to move towards IFRS reporting. Otherwise, there are bound to be problems with the discrepancy between different reports. Hopefully, they will make the right decision.

[louis vuitton mahina]

this part of blog "The measure, opposed by private lenders and critics of an expanding federal government, was included in a package of proposed changes to an overhaul of the U.S. healthcare system." was very interesting, thank you!

[Jordans 5]

Abundance is a philosophy; it appears in your physiology, your value system, and carries its own set of beliefs. You walk with it, sleep with it, bath with it, feel with it, and need to maintain and take care of it as well.

[Air Max TN]

I have got read activities linked fashion pointing to web-site very first,combined with i was sorry so that they fund that a lot of the vast majority blogusers for your requirements watch similar to when worthless trash,yet somehow your business opportunity have been not, i enjoy look into your favorite internet page,as well as a approach better perception are content and may want to study matter modern,as well as the approach sense the individual site since

[coach handbags]

It's joy to know you, wishing the nicest things always for you, not only today, but all the year through because you are really a joy to know.

[Air Jordan]

Your blog brings me a lot of fun. Very glad to have the opportunity to meet you. Take ralax and give yourself a surprise, and we will live more happy.

[Michael]

Very good and interesting article posted...Specially "One concern about adoption of IFRS in the U.S. is that it would eliminate competition between standard setters and grant monopoly status to the IASB."
http://www.hotfileseek.com

[nike shox]

Why not let market forces drive the decision? Doing so keeps competition alive between the standard setters and would result in a more orderly transition to IFRS for U.S. companies.

[nike shox]

Why not let market forces drive the decision? Doing so keeps competition alive between the standard setters and would result in a more orderly transition to IFRS for U.S. companies.

[nike shox]

Most countries are moving toward IFRS (over 100 currently), and if the US moves away from IFRS, multi-national companies will be reporting their primary reports in IFRS, creating parallel reports in US GAAP, which will lead to more auditing fees and errors, and for some small segments of their companies which would normally accept IFRS, they would be reporting in local GAAP. This type of financial shuffling serves no one.

[Work From Home]

Very good and interesting article posted...Specially "One concern about adoption of IFRS in the U.S. is that it would eliminate competition between standard setters and grant monopoly status to the IASB."

[DudleyRoseann]

I strictly recommend not to hold back until you get enough money to order all you need! You can just take the mortgage loans or just financial loan and feel fine

[used cell phones]

interesting post.Most countries are moving toward IFRS.US will have to move towards IFRS.It would eliminate competition between standard setters and grant monopoly status to the IASB..

[Acai Optimum]

very informational... educative as well, i read and felt like reading over and over again....good job!

[Homeowner Loans]

Enjoyed reading - thank you.

[Payday Loans]

Great post - enjoy reading the old posts on this site.

[Top Grade Acai]

I think that the US will definitely have to move towards IFRS reporting. Otherwise, there are bound to be problems with the discrepancy between different reports. Hopefully, they will make the right decision.

[Acai Berry]

Wonderful post... Keep up the good work!

[buy acai berry]

Just wanted to let you know that it’s not showing up properly on the BlackBerry Browser (I have a Pearl). Anyway, I’m now on the RSS feed on my laptop, so thanks!

[Creative Recreation]

Take a look at the new models of creative recreation http://men.shoes54.com/cat1/Creative-Recreation-for-men.html