The ever-increasing interconnectedness of the global economy and capital markets has accelerated the push for a single set of high quality global accounting standards. International Financial Reporting Standards (IFRS) are used as the primary accounting framework, or are in the process of being adopted, in more than 100 countries throughout the world, including nearly all significant capital markets outside of the United States.
The drive towards IFRS in the U.S.
The impact of IFRS accounting standards is already being felt by U.S. companies. Some companies are subsidiaries of multinational entities where the parent reports under IFRS accounting and financial reporting has been aligned for consolidation with the parent. Others are domestic companies with non-U.S. subsidiaries where reporting back to the parent is in accordance with IFRS.
The drive towards the adoption of IFRS for all companies in the United States has begun despite some recent road bumps due to the global economic crisis. The U.S. Securities and Exchange Commission (SEC) has proposed a roadmap for the adoption of IFRS by public companies in the U.S., and the Financial Accounting Standards Board (FASB), the accounting standard setting body in the U.S., has committed to converging U.S. Generally Accepted Accounting Principles (GAAP) with IFRS.
Transitioning from U.S. GAAP to IFRS is not just an accounting issue, but can result in significant changes throughout the organization. In addition to the changes to financial reporting, a switch to IFRS accounting will likely impact areas such as information systems, vendor contracts, tax reporting, and incentive compensation arrangements and benefit plans. Appropriate implementation planning is critical to the successful adoption of IFRS.
How we can help
Plante Moran is ready to help you with your IFRS needs. Our international specialists work closely with clients to tailor solutions to fit their specific needs. We are also able to leverage our membership in Praxity, AISBL, which provides us with access to professionals throughout the world. Our IFRS accounting services offerings include:
- Audits of IFRS financial statements
- IFRS impact assessments
- IFRS implementation planning
- IFRS technical support