Ifrs The Transition Cost Associated With Adoption

OVERVIEW It is the greatest of times for over 100 countries worldwide, why you might ask? Well, because all of these countries have decided to implement the new standards of accounting, which is International Financial Reporting Standards (IFRS). However, the United States of America is one of the few large financial powers left in the world who hasn’t totally adopted IFRS. Indeed, fully adopting IFRS in America would bring countless additional benefits instead of conflicts. Also recent evidence shows that IFRS has been experiencing success worldwide in countries that have embraced it. Many say the biggest setback for the slow movement towards IFRS in America is the transition cost associated with adoption. However, I believe fully adopting IFRS including the business transition cost would be extremely beneficial for the future of America. HISTORY OF U.S GAAP The United States Securities and Exchange Commission (SEC) was established in the mid 1930s during the Great Depression. As a result, the main purpose for its creation was to provide some standard in disclosing financial information and to stop allowing a largely unregulated business environment. However, after the SEC was created, there were still no accounting standards in place, which led to inventing the American Institute of Certified Public Accountants, and also to the Accounting Standards Board. According to Stephen Zeff from Rice University, the American Institute of Accountants (AIA), published theShow MoreRelatedThe International Financial Reporting Standards1487 Words   |  6 Pagesthe potential use of the International Financial Reporting Standards (IFRS), as a substitute method of â€Å"corporate disclosure to its’ current reporting standards (GAAP)†, (American Institute of Certified Public Accountants, 2014). 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