International Financial Reporting Standards
Generally Accepted Accounting Principles of the United States of America (U.S. GAAP) is constantly changing and being redefined. This has never been truer than in today's business environment, as the United States of America and the rest of the world gravitate towards a single set of accounting and reporting standards called the International Financial Reporting Standards (IFRS).
Currently, over 100 countries follow IFRS, abandoning what is referred to as "National GAAP". The Financial Accounting Standards Board (FASB) is currently working with the International Accounting Standards Board (IASB) to converge IFRS and U.S. GAAP with projections of adoption of the new international standards in some cases by as soon as 2014.
During 2010, FASB began implementing and recommending a great deal of change to U.S. GAAP and there is even more on the horizon as U.S. GAAP becomes more in line by converging with IFRS. This convergence will dramatically change the accounting treatment for assets and liabilities, revenue recognition, footnote disclosures, and financial statement presentation, as well as other accounting principles.
Lessons learned from other countries that have already fully adopted IFRS is the need to plan ahead at least one to two years before fully adopting the new standards. A proactive approach will ultimately save time, money, and avoid many of the pitfalls that befell the companies in other countries that unfortunately waited until the year of adoption.
At Holbrook & Manter, we are already preparing for these changes and understand how this convergence will affect your company or organization. As a member of PKF North America, an association of independently-owned accounting and consulting firms, we have a full arsenal of resources to proactively assist you with the upcoming challenges of the convergence to a global set of accounting standards.
For more information on IFRS convergence, please contact us today.