Krell, E. (2009, April 2). It benefits the economy by increasing the growth of its international business. Additionally, due to U.S. GAAP’s high standards, financial reporting improvements will be minor. In addition, users of financial statements must be knowledgeable in both GAAP and IFRS to completely dissect the financial information reported by multi-national corporations (MNCs). Convergence Indian GAAP to IFRS is expected to result in several benefits to Indian entities. yoyo Promoting Your Online Business With Article Marketing, State Run Capitalism Is Not the Answer to Being Competitive In the Global Market Place. “Under the present system, the SEC attempts to ensure uniformity and consistency in financial reporting. As global business environments improve, it is inevitable that one set of accounting standards is needed. The convergence to IFRS has improved the comparability of financial statements in the EU. <> %PDF-1.5 It focuses on “checking the boxes” more than portraying an underlying economic reality” (Thompson, 2009). endobj Although the two boards have made significant progress, efforts to converge critical accounting standards — such as those dealing with revenue recognition, financial instruments and leases — have been challenging and time consuming. of benefits (e.g., He, Wong, & Young, 2012; Liu, Yao, Hu, & Liu, 2011). While the benefits of convergence with IFRS were widely acknowledged among x��=is7��]�����-�� }dR���8�L�x-eR[��@��ČD*e����8�D�n̈́b7�w��]8�����˪�HQ These costs will burden small to medium sized companies that lack the capital and resources that large MNCs possess. Unlike those studies, we examine the ex ante implications of IFRS convergence in China. (2013, January 1). Is Ron Mead's Probate Investing Course Any Good? (2010, January 1). <>>> <> �O�*����^N6��/~�������ɷ��t��ͤ:�q���L��_΋����7g��#0r?��/_��������/Ĥ�� �#�+��{��*�j'�)%}���z�ۏ�aUY5���OS���\���� ��|��H">G� � �O�I��?����f���t�z�ݮ��u|�t�8�0�^�f��ze�f��e�D���ڐ>F!�G��$��.+`�MY?_���[���8j��BOW�eV��m@""��ڶl�_�NԶ/E����^N��t�zU�#��kʶ�tZH1�BF�c]��d��m�~�,��� �B*�. Retrieved September 18, 2014. The IFRS, on the other hand, are made keeping global standards and environment in mind. Krell, E. (2009, April 6). However, regulators cannot enforce uniformity in a principles-based system” (Thompson, 2009). Intermediate accounting (14th ed.). Changing accounting standards to be open to greater interpretation may attract higher cases of internal, or company fraud. Pros and Cons of IFRS. 3 Several of their convergence projects are scheduled for completion by the second quarter of 2011, including those relating to: Semi-structured interviews with accounting practitioners were conducted to achieve this objective. 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Another disadvantage to IFRS is the cost expected to be associated with transitioning from GAAP based standards and accounting information systems to IFRS based accounting information systems. convergence with IFRS will provide greater credibility and transparency to financial reporting in Malaysia making it easier for global investors to understand and rely on the financial report of Malaysian companies. If the U.S. converts, the SEC is sure to lose a great deal of control and influence over the accounting and reporting practices. Retrieved September 18, 2014, from http://www.wiley.com/WileyCDA/Section/id-403632.html. endobj This article positions the United States' convergence towards IFRS as advantageous against disadvantageous. Such initiatives have consequences on the world of accounting diversity, and the standards convergence of GAAP along with the IFRS largely … The objective of this project is to eliminate a variety of dif­fer­ences between International Financial Reporting Standards and US GAAP. The analysis focuses on several emerging countries with experience in IFRS implementation and it also brings forward the case of Romania, which is treated separately. In other words, IFRS is open to more interpretation than rules based GAAP, and can lead companies to release fraudulent representations. Thompson, R. (2009, September 14). A major holdup in the convergence of IFRS and GAAP rests with control. Is inevitable that one set of benefits of convergence with ifrs standards improve, it is inevitable that one set of standards. 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