Convergence from GAAP to IFRS Essay Example | Topics and Well Written Essays - 1000 words

Convergence from generally accepted accounting principles to IFRS - Essay utilizationThe paper will further discuss the benefits, which will accrue to United States firms, investors, and the economy as a whole, as a result of converging from United States Generally Accepted Accounting Principles to International monetary insurance coverage Standards. Convergence from Generally Accepted Accounting Principles to International pecuniary Reporting Standards Currently, International Financial Reporting Standards are mathematical functiond by more than 12,000 companies in the world and ingest been in use in over 100 countries around the globe. tally to Kaiser et al. (2012), there are various ongoing tolerates, which were initiated by the International Accounting Standards Board and the Financial Accounting Standards Board with an aim of enhancing the International Financial Reporting Standards and America Generally Accepted Accounting Principles, and eventually making the principle s fully compatible. Majority of these projects covers the key components of the fiscal reports. Through these projects, the boards plan to enhance financial disclosure information for shareholders while also aligning U.S. GAAP and international bookkeeping standards. Revenue recognition, financial instruments, and leases are deemed as the priority projects largely as a result of existing difference of IFRS and U.S. GAAP and the necessity for enhancements, especially in the principles they are intended to replace. The boards have also concentrated on financial reports presentation and consolidations projects due to considerable implications they might have (Kaiser et al., 2012). According to Henson (2012), in late 2011, SEC Chief Accountant, James Kroeker, indicated that considerable progress had taken place on numerous IASB and FASB Memorandum of Understanding overlap projects encompassing other comprehensive financial and income reporting bring together value guidance. In January 2012, the chairman of IASB, Hans Hoogervorst acknowledged that International Financial Reporting Standards pose several challenges for the SEC. U.S. uses a sophisticated, mature and time stated set of bookkeeping standards, and this makes it difficult to make the convergence decision. In June 2012, IASB and FASB agree on lease bookkeeping model where all leases with a period of one year or more would be reported on the balance sheet. Hans Hoogervorst indicated that the two boards anticipate completing the convergence project by year 2013 (Henson, 2012). The considerable progress in the convergence projects requires the United States companies, to start examining the implications of the convergence on their operations. This would enable companies to plan how to adopt the changes, which will arise from the convergence. This implies that, at the beginning of 2014, the U.S. public traded corporations might be obligated to file financial reports with the SEC using the International Finan cial Reporting Standards. In my opinion, it is just for the United States to converge from America Generally Accepted Accounting Principles to International Financial Reporting Standards. The convergence has various challenges and advantages. The challenges facing the transition may be addressed appropriately by all stakeholders pertain in the convergenc