1. "Will IFRS Become the Global Accounting Standard?"
2. "Should U.S. Companies Be Allowed to Close the GAAP?"
Will IFRS become the global accounting standard?
In order for IFRS to become the global standard, US culture would have to give up its litigious ways, which is unlikely in the short run. However, IFRS and US GAAP may become acceptable as alternatives, lending itself to a natural experiment. If this experiment is successful, IFRS may converge with US GAAP into one global set of standards.
US GAAP provides more detailed guidance on how to account for important matters (Bonaci, Mustata & Dumitru, 2012), such as how many shares must be owned to force consolidation. IFRS only gives the general guidance on how to resolve whether to consolidate (must control). However the evidence that signals "control" or "does not control" is not specified ...
Your discussion is 467 words and two references and explains under what conditions US GAAP and IFRS will likely converge and when it will not. It argues that the US should permit IFRS and why.
US vs International Financial Reporting Standards
Where does the U.S. stand with IFRS now?View Full Posting Details