International Financial Reporting Standards (IFRS)
There has been an ongoing effort to converge U.S. GAAP and IFRS for much of the past decade, but it’s only begun to receive serious attention in the last two years. The standards-setting bodies, the Financial Accounting Standards Board (FASB) for U.S. GAAP and the International Accounting Standards Board (IASB) for IFRS, have identified 10 key areas where they intend to issue new accounting standards during 2011 and 2012 as part of the convergence of U.S. GAAP and IFRS standards.
The proposed changes will directly affect all entities, private and public, that follow U.S. GAAP accounting standards. This means that U.S. companies that have never considered changing to IFRS in the past and aren’t likely to do so in the future will nonetheless be subject to the changes.
As with any substantial change to financial reporting, these changes will have significant impact on organizations, more so in some industries than others. Focus right now is on financial instruments, lease accounting, and revenue recognition with guidance on the statement of comprehensive income and fair value measurement also expected. Also on the horizon is a proposed simplification of U.S. GAAP for private companies.
Prepare now for significant changes in accounting standards
In addition to the impact on their financial reporting policies, organizations will need to evaluate the impact of these changes in U.S. GAAP on their information technology systems and internal control processes.
As FASB and IASB continue their efforts to converge U.S. GAAP and IFRS, our accounting standards specialists are at the forefront of these discussions and you can depend on them to provide the information your organization needs to prepare.
They can help you understand the full impact of the changes on your business and the process you will have to set up to adopt the new standards.