Ifrs and Gaap Convergence
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Week 8 Assignment 1 IFRS and GAAP Convergence Janet Rivera Cruz Prof. Basil Jackson Accounting 304 December 2, 2012
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The purpose of this paper is to describe what accounting convergence means and assess the likelihood of the convergence being completed and implemented in the next five (5) years. IFRS is the principle based set of standards that establish standards and dictate specific treatments. IFRS has become a global standard for companies when preparing financial statements. IFRS consist of multiple reports stated on the Wikipedia website. The two reports that will be discussed in the paper are IFRS and GAAP. GAAP is an Accounting Standard that provides guidance for financial accounting that accountant has to follow for preparing financial statements, and transaction summaries. Certified Public Accounting (CPA) firms and other companies use the GAAP as guidance for financial statements when preparing business expense, income, assets and liabilities. The GAAP does not have one accounting standard but consist of multiple standards for accounting transactions. The Securities and Exchange Commission (SEC) reaffirmed its support for the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) in its “Commission Statement in Support of Convergence and Global Accounting Standards” in February 2010.The SEC also reaffirmed it continues to believe that a single set of highquality, globally accepted accounting standards will benefit U.S. investors and that this goal is consistent with its mission of protecting investors; maintaining
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fair, orderly, and efficient markets; and facilitating capital formation. The SEC will continue to evaluate, through 2011, whether to incorporate IFRS into the financial reporting system for U.S. issuers; if it does proceed, the first time U.S. firms would report using IFRS would be no
Week 8 Assignment 1 IFRS and GAAP Convergence Janet Rivera Cruz Prof. Basil Jackson Accounting 304 December 2, 2012
Cruz 2
The purpose of this paper is to describe what accounting convergence means and assess the likelihood of the convergence being completed and implemented in the next five (5) years. IFRS is the principle based set of standards that establish standards and dictate specific treatments. IFRS has become a global standard for companies when preparing financial statements. IFRS consist of multiple reports stated on the Wikipedia website. The two reports that will be discussed in the paper are IFRS and GAAP. GAAP is an Accounting Standard that provides guidance for financial accounting that accountant has to follow for preparing financial statements, and transaction summaries. Certified Public Accounting (CPA) firms and other companies use the GAAP as guidance for financial statements when preparing business expense, income, assets and liabilities. The GAAP does not have one accounting standard but consist of multiple standards for accounting transactions. The Securities and Exchange Commission (SEC) reaffirmed its support for the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) in its “Commission Statement in Support of Convergence and Global Accounting Standards” in February 2010.The SEC also reaffirmed it continues to believe that a single set of highquality, globally accepted accounting standards will benefit U.S. investors and that this goal is consistent with its mission of protecting investors; maintaining
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fair, orderly, and efficient markets; and facilitating capital formation. The SEC will continue to evaluate, through 2011, whether to incorporate IFRS into the financial reporting system for U.S. issuers; if it does proceed, the first time U.S. firms would report using IFRS would be no