IFRS STANDARDS AND THEIR POLITICAL ACCEPTANCE IN EUROPE AND UNITED STATES
The year 2005 marked the start of a new era in global conduct of business, and thefulfillment of a thirty-year effort to create the financial reporting rules for a worldwidecapital market. For during that year’s financial reporting cycle, as many as 7,000 listedcompanies in the 25 European Union mem...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2011-01-01
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| Series: | Studia Universitatis Vasile Goldis Arad, Seria Stiinte Economice |
| Subjects: | |
| Online Access: | http://www.uvvg.ro/studiaeconomia/images/2001/v1/7.%20IFRS%20STANDARDS%20AND%20THEIR%20POLITICAL%20ACCEPTANCE%20IN%20EUROPE%20AND%20UNITED%20STATES.pdf |
| Summary: | The year 2005 marked the start of a new era in global conduct of business, and thefulfillment of a thirty-year effort to create the financial reporting rules for a worldwidecapital market. For during that year’s financial reporting cycle, as many as 7,000 listedcompanies in the 25 European Union member states, plus many others in countries such asAustralia, New Zealand, Russia, and South Africa were expected (in the EU, required) toproduce annual financial statements in compliance with a single set of international rules—International Financial Reporting Standards (IFRS). Many other business entities, whilenot publicly held and not currently required to comply with IFRS, will also do so, eitherimmediately or over time, in order to conform to what is clearly becoming the newworldwide standard. Since there are about 15,000 SEC-registered companies in the USAthat prepare financial statements in accordance with US GAAP (plus countless nonpubliclyheld companies also reporting under GAAP), the vast majority of the world’s largebusinesses will now be reporting under one or the other of these two comprehensivesystems of accounting and financial reporting rules.Most other national GAAP standards have been reduced in importance or are being phasedout as nations all over the worlds are now embracing IFRS. For example, Canada hasannounced that Canadian GAAP (which was very similar to US GAAP) will be eliminatedand replaced by IFRS by 2011. More immediately, China will require listed companies toemploy IFRS. It is quite predictable that only US GAAP will (for the foreseeable future)remain as a competitive force in the accounting standards arena, and even that situation willbe more a formality than a substantive reality, given the formal commitment (andsubstantial progress made to date) to “converge” US GAAP and IFRS. |
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| ISSN: | 1584-2339 2285-3065 |