Why Should the Us Adopt Ifrs?

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Date Submitted: 04/17/2012 12:36 PM

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Should the United States Adopt the International Financial Reporting Standards?

International Financial Reporting Standards (IFRS) is a set of accounting standards (principal based) developed by an independent, not-for profit organization called International Accounting Standard Board (IASB).Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). IAS was issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On April 2001, the new IASB took over from the IASC the responsibility for setting International Accounting Standards. The first IFRS was issued in 2003, by which time at least 19 countries required compliance with the International Standards. In 2005, the European Union (EU) member states committed to requiring IFRS for all listed corporations in their jurisdictions (EC, 2002). The IASB has so far issued eight new standards, in addition to modify many of the IAS of its predecessor. As of September 1, 2008, the IFRS frame work include: IFRS 1: First-time Adoption of IFRS; IFRS 2: Share-based payment; IFRS 3: Business Combinations; IFRS 4: Insurance Contracts; IFRS 5: Non-current Assets Held for Sale and Discontinued Operations; IFRS 6: Exploration for an Evaluation of Mineral Resources, IRFS 7: Financial Instruments: Disclosures; and IFRS 8: Operating Segments.

The primary goals of IFRS are to provide a global framework for how public companies prepare and disclose their financial statements. The international economy is growing and international trade is expanding wider than ever. Having an international standard is a need and especially important for many large companies, which of many have subsidiaries in different countries. Adopting a single set of world-wide standards will simplify accounting procedures by allowing many companies to use one uniform global “language” for financial reporting. This is a major step in transforming the world economy...