« IFRS or U.S. GAAP – Scenarios for the Future | Main | IFRS for Small and Medium-sized Entities »

May 18, 2009

Comments

find accountant

Thanks for the great article.i do agree that accounting is a language which although not understood by all is acknowledged as the universal language of business

WalshPriscilla32

It's well known that money can make us autonomous. But how to act if someone doesn't have money? The one way only is to receive the home loans or small business loan.

Tobler Law

Thanks for the post! I think I am for adoption, but I'll have to do some more research.

William Menchero, CPA

I fully support the adoption of IFRS in the U.S. for many reasons. In simplistic terms, during international sporting events all teams compete on the same level playing field under the same rules. Each team does not play against another according to their separate country rules. Adoption would increase transparency and allow cross-border and multinational comparability of financial statements, thus I agree with supporters this would ultimately lead to lower costs of capital.

Uniform accounting standards would ease the time consuming and costly process of both preparing financial statements according to the local or statutory accounting standards, and then having to prepare a completely different set of financial statements according to a disparate set of accounting standards used by regulators in different capital markets. An added benefit of adoption would also be seen in the reduction of the cost and effort required to prepare comparative financial statements including vertical, horizontal and common sized financial statement analysis of cross border and multinational companies by analysts and financial institutions. The adoption of IFRS and use of uniform accounting standards would also draw investors to diversify their investment holdings and pursue global investment diversification strategies without the fear of the unknown mainly different accounting results from the use of different standards.

No set of standards is without its critics if US GAAP were perfect there would not have been a need to change (supersede) any existing standards or continue to add new standards. Until we adopt we should continue with the efforts to converge those standards where there still remains a wide divide which will ultimately make the transition to adoption smoother.

JCR,CPA

Definitely the US need to adopt the IFRS as soon as possible.Let forget about who is the leader and who is the follower.IFRS is the future and we can remain in the past.

Joe Jefferis

Mark to market accounting puts financial statements in the realm of speculative valuations. Lower of cost or market reflects real and historic economic activity. Mark to market is a "mob" based mentality and forces short term, trendy perspectives. What is the flavor of the month? What is today’s market mover? If you’re not invested in the flavor of the month or today’s market mover, then you are worthless is the mark to market message. Follow the mob or loose out. Those who most favor adoption of IFRS are positioned to gain financially from adoption through their advisory roles. Bring back Glass-Seagull financial structural separations and bring back stability while ridding ourselves of mark to market fantasies. The reforms enacted to cure the prior great depression were repealed over the last decade and they are the cause of the current economic depression. Bankers and politicians are not good at risk taking. One size fits all globalism stifles innovation, ingenuity, competition and entrepreneurship. A single accounting standard will stifle innovation, ingenuity, competition and entrepreneurship. Revitalize capitalism. End the movement for a single oppressive body to govern. Stop designing corporations to satisfy today’s regulatory advantage. Celebrate our differences and get the international focus back on productivity, quality, innovation, and meeting the demands of the marketplace. Accountants are scorekeepers. Much like bankers and politicians, accountants not risk takers. True leaders are lonely people, not popular. USA will lead the world out of this mess by setting the example and breaking up the too big to fail, failures. It is happening now and I am proud to be part of the revitalization of true capitalism. Please join in the movement to bring back Glass Seagull and eliminate mark to market.

Jennifer J. Qualteri

No neither... US GAAP should remain the standard for accounting in the United States.....International Standards are wild haired and a "National Incident" waiting to happen. It should be obvious to most of you that the economy is a disaster. This is caused by globalization and the acceptance of standards that are ruinious. Some say we cannot afford not to go global, when in reality the price is too high. Case in point "off balance sheet financing" That was not around in the 1950s, and comes from a part of the planet farther East than New York.

Jerry M. Baldwin

Since when is the USA, including the accounting profession, a FOLLOWER instead of a LEADER? Let's do it our way!!!!!

Stephen Gregory

Throughout its history, the USA has led by example with a strong moral compass, intolerance for unethical behavior, and recognition of achievement. We ARE the standard by which others nations measure success. Of course the rest of the world wants the US to adopt a simpleton set of compromises for rules; success will then be perceived as more easily achievable. But their “success” will be as tangible as a silhouette with dire consequences to OUR capital markets.

Establishing accounting standards is not a popularity contest; US GAAP is the criterion by which OUR companies measure success!! They are the backbone, part of the infrastructure, supporting OUR capital markets and providing millions of investors around the globe with peace of mind. Occasionally there are hiccups; rule setting is an evolutionary process, but through trial and error we make the system stronger. Without them, the rules of the game become vague, and inevitably value is destroyed—we see the consequences of inattentive governance over our capital markets in our media outlets today. As Americans and investors, we cannot tolerate similar laissez-faire attitudes in the measures of success in OUR capital markets.

Adoption of IFRS? Just because everyone else wants to do it, doesn’t make it right. Our markets, both commercial and capital, are the largest in the world; if we want a voice in determining the rules on OUR playing field, then the rule making stays at HOME. Rule-making cannot be outsourced to accommodate the uneducated or compromised. If another capital market wants my money, that nation should bend over backwards to prove its markets and market participants possess the highest level of integrity. I do not make accommodations from my ideals so that second-rate economies can manipulate the rules to suit their agendas; the rules then become worthless and I become a gambler rather than a calculated risk taker.

This nation is great because it dares to lead. Our profession must be equally brave and stand against the erosion of our principles. IFRS will erode our great principles.

Debby Stirn CPA

Threats by the EU to sidestep IFRS do not make adoption attractive at this time.

Laura Prevratil, CPA

Covergence really prolongs the process....adoption is the best way to go. Once adopted, and once part of the process permanently, the US can sit at the table with everyone and discuss the best standards. Keeping it the way is it allows the US government and special interests to influence standards, and as we have seen historically, this results in problems. The best way to take the politics out of the process is to have a lot of participants who have to work together to gain acceptance for the standards. It is not as though the IFRS will just dictate standards...the process is long, and the US will be part of it.

Mary Beth Collins, CPA

The US should move onto the IFRS standards as soon as possible. As the rest of the world moves towards convergence, using the same accounting standards as the rest of the world only makes sense. Most of our companies operate globally – companies need one set of accounting standards to follow in all markets.

Accountants should receive the same training and follow the same standards everywhere. This would make interfacing with foreign subsidiaries substantially easier and save money.

In addition, we need to be a leader in setting international standards and we should be at the forefront of nations adopting the international standards. Right now, we have the opportunity to take a lasting leadership role in global standard setting. If we do not switch to IFRS soon, we will lose all sway with the international standard setters and we will lose our influence over future international standards. This will only hurt the US in the long run, because someday we will make the switch.

Frank Bannon CPA

In my view we need to straighten out US GAAP by reversing so-called "fair value accounting" and restoring the emphasis on the income statement and historical cost based accounting. Codification of GAAP and going to international standards should be put on hold until this is done. To determine if standards are truly "accepted" they should be put up to the vote of the CPA's throughout the country. A survey of the literature on the subject should convince the membership that a least for many assets the fair value approach is fundamentally flawed and in many instances defies objective measurement.

maulik

Enlightened!

Larry

It is a matter of who do you fear most.
Adopting the IFRS standard will take away the ability and the threat that Congress, the SEC, or President will influence or become the rule making body. True independence and uniformity comes from an international standard.
Why do we fear the International body?

Jason Lee

No. We should find common ground where possible and hold firm where it's not possible. Accounting is a language which although not understood by all is acknowledged as the universal language of business - giving up U.S. GAAP for world-wide socialized standards is synonymous with folding to the will of the uninformed majority. We all collapse to the same low standards but in different levels of severity.

Just say no to the IASB bullsh**.

Joseph Blanchard, CPA

The cost to implement IFRS is not worth the added benefit of "comparability." The SEC estimates .12% of revenues to implement. Nation wide, this means several billion dollars to adopt IFRS. The additional comparability is not worth several billion dollars. Asking companies to spend this money in our economic environment is financial suicide. Convergence is obviously superior to adoption from a cost benefit perspective.

Mike

Country specific variances within IFRS are less divisive than the differences between US GAAP and IFRS. US GAAP is very country specific, requiring a knowledge of the US tax code in order to make informed decisions about comparability with foreign filer financial statements. Investment and financial decisions should be made based upon company specific operations rather than trying to interpret and reconcile between accounting and tax differences. One set of high quality financial standards, IFRS, will simplify investment decisions, eliminating potential financial misunderstandings. If US GAAP were to remain the dominant accounting standard, then US GAAP should have eliminated references long ago to the US tax code, specific US cultural issues,and US industry specific requirements.

larry

Convergence is the only way to go. Why should we follow the blind. We are supposed to be leading and setting an example for the rest of the world. Changing over to IFRS would not be in our best interest in the long-term.

randall enders

GAAP is the way to go. The IFRS is a scam. When established in 1973 the thrust of the IASB was to bring international standards up to GAAP standards. Not the other way around. We're CPA's not sheep. I for one am not going to stand by and watch our standards diluted into a buffet of "principles based" poppycock which provide no accountability whatsoever -- by a bunch of billionaire puppets -- so some quick buck artists can have access to our U.S. markets and put U.S shareholders at risk. Example 141R is a joke.

Ricci Granberg, CPA

Convegence, while a desireable goal, is doomed to fail and never address the multitude of IFRS-US GAAP differences. Adoption of IFRS should be the primary goal. It is clear that the two GAAP system we now have (i.e., IFRS and US GAAP) is resulting in politicians playing one standard setter against the other weakening the independence of both organizations. If this continues, we risk damaging the credibility of both organizations and producing lower quality accounting standards that are the result of special interest preferences.

S

Does the U.S. really want to relinquish rule-making for our country to an entity that is realistically under the control of the EU?

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