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International Financial Reporting Standards
Finance & Accounting
Pages 4 (1004 words)
In the United States the prevailing accounting framework utilized by professionals in the field of accounting and finance is the U.S generally accepted accounting principles (GAAP). Despite its effectiveness in other parts of the world U.S. GAAP is not an accepted accounting framework.
The IASB is responsible for oversight of the IFRS. This agency was formed in 1973 under its former name International Accounting Standards (IAS). The IFRS were created in 2001 (Articlebase, 2008). The first nation to adopt the IFRS framework was the European Union. The countries of Europe adopted IFRS in 2005 (Moya, Perrramon, Constans, 2005). The biggest stock exchange in the European nation is the London Stock Exchange (LSE). All domestic companies must abide by IFRS and U.S. companies that want to list their stocks in the London Stock Exchange must convert their financial statements to IFRS. In U.S. GAAP the financial statements of all companies must follow a specific format, but under IFRS companies can utilize multiple formats for their financial statements. Despite the fact that the IFRS started in Europe, the goal of the IASB is for the IFRS to become the global standard in the accounting community. In a little over a decade the IFRS has penetrated a lot of nations worldwide already. There are 153 countries across the world that adopted IFRS which implies that nearly 75% of the world has currently gone through the process of implementing IFRS (Pwc, 2012). The United States is listed as one of the countries that have adopted IFRS, but in reality the U.S is still in a conceptual phase due to the fact the entire financial system of the U.S. is based on U.S. GAAP. ...
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