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Ifrs in the United States: If When and How

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Submitted By abasandani
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IFRS in the United States: If, When and How
Donna L. Street

s described by Erchinger (2012), for decades various United States (US) Securities and Exchange Commission (SEC) Chairs and Chief Accountants have expressed support for the development of one set of globally accepted accounting standards. Since the formation of the International Accounting Standards Board (IASB) in 2001, SEC leaders have repeatedly indicated that the logical choice for globally accepted standards is the International Financial Reporting Standards (IFRS) issued by the IASB. However, in line with other large economies, such as Japan, India and China, as of June 2012 the US had not adopted IFRS.1 This paper explores when and how, and indeed if, IFRS will become the basis for the financial reporting of domestic SEC registrants in the US. Readers are encouraged to first review Erchinger’s (2012) history of the SEC’s consideration of IFRS in the US included in this forum and especially Table 1 of this article, which provides a chronology of SEC releases regarding incorporation of IFRS into the US financial reporting model. This paper complements Erchinger’s by assessing approaches recently explored by the SEC for incorporating IFRS into the US financial reporting model. A decision can lead to correct or incorrect action. However, as articulated by many SEC constituents, uncertainty associated with repeated delays and hence ‘no decision’ by the SEC is clearly not in the best interest of investors and other financial statement users, registrants, auditors and students. Furthermore, as it considers various models for incorporation of IFRS into the US financial reporting model, the SEC and its constituents must understand that only if all countries, including the US, adopt IFRS as issued by the IASB will the SEC’s pursuit of global accounting standards be attainable. Adapting or converging with IFRS is...

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