Will There Be Global Accounting Standards Adopted Within the Next 5 Years?

The SEC recently issued for comment a proposed roadmap for initially allowing and eventually requiring U.S. issuers to report financial results in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") rather than generally accepted accounting principles in the United States ("U.S. GAAP").
IFRS is a set of principles-based accounting standards published by the London-based IASB. The SEC has encouraged the development of IFRS as a uniform accounting framework to facilitate cross-border offerings. It has also encouraged the convergence of U.S. GAAP and IFRS standards. Since 2002, the Financial Accounting Standards Board ("FASB") has been working with the IASB to harmonize U.S. GAAP and IFRS with the goal of producing a single, high-quality set of accounting standards.
Despite the movement toward convergence, differences between U.S. GAAP and IFRS remain. Key areas of divergence include accounting for pension liability, taxes, financial instruments, and business combinations. In addition, IFRS and U.S. GAAP are fundamentally different in that U.S. GAAP standards are primarily rules-based, whereas IFRS standards are primarily principles-based. Rules-based standards typically offer more detailed application guidance. Principles-based standards require management to exercise more judgment in determining how to account for transactions. As a result, IFRS reporting demands more significant time and input from management.
IFRS has quickly become the lingua franca of accounting. More than 100 countries now permit or require IFRS reporting. Since 2005, all companies incorporated and listed in a member state of the European Union have been required to use it. Other significant countries allowing or requiring IFRS