Joshua Lenardson 4/07/10 ACCT.

301 Assignment #1

The IASB is an independent accounting standard board that is based in London. It has 14 members from nine countries, which includes the United States. The IASB began on April 01, 2010 which was when they surpassed the International Accounting Standards Committee. It is funded by contributions from major accounting firms, private financial institutions and industrial companies, central and development banks, and other international and professional organizations throughout the world. The AICPA was a founding member of the International Accounting Standards Committee, but the IASB neither sponsors nor endorses this website. The IASB has a set of reporting standards and they are called the International Financial Reporting Standards (IFRS). Which are becoming the global standards for financial reporting.

IFRS is already a part of about 12,000 companies in almost 100 nations, which include listed companies in the European Union. Other countries involved in the change are Canada and India, are expected to transition to IFRS by 2011. Some estimate that the number of countries requiring or accepting IFRS could grow to 150 in the next few years. Other countries, such as Japan and Mexico, have plans to converge their national standards. The SEC is not allowing any US public companies to change over to IFRS, so they all must continues to use GAAP for all of their financial statements. Several large multinational corporations, such as Procter & Gamble, however, have started using IFRS for their foreign

subsidiaries where allowed by local law. Also, some private companies owned by foreign companies are using IFRS to obtain financing in the U.S.
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The difference between IFRS and GAAP is that IFRS has less detail in the financial statements. Probably the best evidence of how much less detail IFRS contains is that IFRS fits into one book, about two inches thick. In contrast, the FASB paperbacks of pronouncements, plus the paperback version of the FASB Emerging Issues Task Force consensuses, measure about nine inches thick, and that doesnt include all the U.S. authoritative accounting literature. Some other major differences are IFRS does not permit Last in First out (LIFO). IFRS uses a single-step method for impairment write-downs rather than the two-step method used in U.S. GAAP, making write-downs more likely. IFRS has a different probability threshold and measurement objective for contingencies. IFRS does not permit curing debt covenant violations after year-end. Those are some of the major differences in the transition from GAAP to IFRS.1

http://www.ifrs.com/updates/aicpa/ifrs_faq.html

Work Cited
1. http://www.ifrs.com/updates/aicpa/ifrs_faq.html1