The Disadvantages Of Converge Us Gaap And Irfs Accounting Essay

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In September 2002, the International Accounting Standards Board and the U.S. Financial Accounting Standards Board is equivalent agreed to work together with other countries and regions, accounting for consultation with the agencies in order to achieve convergence of IFRS and U.S. GAAP generally accepted accounting principles (GAAP). A group of high-quality global standards remains a priority of the International Accounting Standards Board and the U.S. Financial Accounting Standards Board (FASB). The decision reflects the IASB and the U.S. Financial Accounting Standards Board (FASB) to call a memorandum of understanding (MOU) between the Norwalk Agreement.

Disadvantages of converge U.S. GAAP and IRFS

Each country has adopted Financial Reporting Standards, it creates a financial report inconsistently. This will become a problem, investors when they are trying to figure out the differences of the financial statements, when they see / consider compliance with accounting standards and financial reporting countries seeking funds to run the business, their capital. International Accounting Standards Board (IASB), to seek a better solution, in order to ease the existing cultural differences, different interpretations, creating a simplified inconsistent accounting standards and financial reporting lack of complexity, conflict and chaos. U.S. GAAP and IRFS each of the differences between the standards generally accepted accounting principles, rule-based, based on the principles of IRFS. Generally accepted accounting principles by a complex set of guidelines, trying to publish in case of any emergency rules and standards, the goal of the International Financial Reporting Standards Report, and then there are specific objectives to provide guidance.

The implementation of the International Financial Reporting Standards is a significant change, the time and cost of related procedures and information systems, there may be no corresponding benefit. When changing procedures and information systems, companies need to re-install procedures and systems, which will spend a very large amount. The organization also need to send their own staff training, seminars and their workers can do their job more effectively. For example: to upgrade and change the way you report to the maintenance of cost, in order to meet the new standards organizations.

In favor of and against the international convergence of accounting standards. When convergence clear once again, as far as possible, simpler, more transparent and comparison between different countries in the accounting and financial reporting. This will result in capital flows and international investment, lower interest rates, resulting in a particular country and countries to increase the economic growth of the company to do business. All stakeholders and the availability of the unified information in a timely manner will be smooth and time-efficient process concept. In addition, the new safeguards to prevent other countries or international economic and financial crisis. Earlier, the International Accounting Standards Board, the International Accounting Standards Committee (IASC) is responsible for the distribution and implementation of International Accounting Standards. Replace the work of the IASC Inter-Agency Standing Committee, in 2001, the International Accounting Standards Board and effort to implement own purposes harmoniz the [and] around the world accounting standards, the financial report of the global financial markets. Globalization in today's society, so that enterprises in markets around the world to integrate operations. The satellite has been set up around the world to allow and expand international exchanges; companies such as Toyota, McDonald's, Nokia, Nike, UPS, and countless people in the ordinary course of business and foreign companies, such as Daimler in many countries - Mercedes-Benz and Chrysler, to start their merger .

Advantages of convergence of U.S. GAAP and IRFS

At present, the company must be prepared to operate in other countries, the financial statements comply with accounting standards, in which country. Japanese accounting principles, in Turkey and in France are different from those in Brazil. This forced the company to have a global business transformation and preparation of financial statements, to meet the needs of each individual national norms. As more and more companies to open an office in a foreign country, and increase global trading seems obvious that the use and understanding of international accounting standards. Not only is the principle of a single set of the load off to prepare a number of international passenger and the company's financial statements, but it will also provide additional benefits, the comparability of businesses and investors. Financial statements from around the world will be better able to compare and evaluate the trouble with others. This will benefit U.S. investors and businessmen, because they will have enough resources to effectively analyze and compare investment opportunities and make informed decisions. At this time, there are 85 countries and many others are in the process of conversion, you need to use the International Financial Reporting Standards (IFRS). Although there are advantages and disadvantages, are converted to the similarities and differences between U.S. GAAP and International Financial Reporting Standards will benefit a lot.

From the perspective of investors, who have good reason to hope that their country overseas investment convergence. International Financial Reporting Standards to feed a growing demand for global investors and capital market globalization. Investors can get more relevant, reliable, timely and respective jurisdictions comparable. As the globalization of capital markets and financial reporting format is a set of standards, the use of accounting principles generally accepted in the United States there is a trend. By using a set of financial statements prepared by generally accepted accounting principles, to help investors better understand the investment opportunities, rather than using a set of financial statements prepared in different countries accounting principles. For a better understanding of the financial statements, investors must spend more time and energy conversion of the financial statements, so that they can confidently compare the opportunity cost. Investor confidence will also be a string is a globally recognized, if the accounting standards. Convergence of International Financial Reporting Standards help investors' confidence in the understanding and quality of financial statements. Today, more than 120 countries around the world with International Financial Reporting Standards and accepted standard for financial statements - some of which have adopted it as its accounting principles.

Milestones that have been made so far in the convergence project

In April 2005, the U.S. Securities and Exchange Commission (SEC), the U.S. corporate regulator ASIC equivalent to set a roadmap to eliminate the requirements of the U.S. Securities and Exchange Commission to and foreign private reconcile ready with U.S. GAAP IRFSs, under the Financial Statements issued a statement. Many Australian entities into the importance of the U.S. capital markets, the Accounting Standards Board to ensure the Australian entity A IRFSs reconciliation process will also exempt interest. The interesting question of the Accounting Standards optional treatment by the United States Securities and Exchange Commission for evaluation. According to reports by the International Accounting Standards Board in a press release on November 15, 2007, the U.S. Securities and Exchange Commission allows the financial statements of non-US companies in the United States did not reconcile to U.S. GAAP statement. The U.S. Securities and Exchange Commission is currently considering whether or not to issue a proposed rule would allow U.S. companies to apply for IRFSs. Identified a series of priorities and milestones in the 2008 issue of the two plates updated Memorandum of Understanding (MOU), stressed that the objectives of the joint project of common principles-based standards. Group leaders of the Group of 20 (G20) calls on standard setters to redouble their efforts to complete the convergence of global accounting standards. This requirement, in November 2009, the International Accounting Standards Board and the U.S. Financial Accounting Standards Board (FASB) released a progress report describes the intensification of their program of work, including organizing monthly joint meeting of the Board, quarterly Updated convergence projects.In 2012 the International Accounting Standards Board, and in their progress, the Financial Accounting Standards Board issued a joint progress report describes the progress made in financial instruments, including joint expected loss impairment ( 'Configuration') and the fusion method to classification and measurement.In of February 2013, the International Accounting Standards Board and the U.S. Financial Accounting Standards Board (FASB) published a high level status of the update and the remaining convergence The timetable for the project. The report includes financial instruments impairment stage of the joint project update.

Reference: (Journal Articles)

â- H Daske - China corporate finance and accounting, 2006 - Wiley Online Library

â- Radebaugh, L. H., and D. L. Street. In 2003. Disclosure of segment and overseas business. International

Accounting and Financial Handbook, edited by FDS Choi Chapter 22. Third edition, New York

New York: John Wiley and Sons

â- Taplin, R. S. (2004). International Accounting harmonious and unified approach to measurement. Accounting and Business Research, 34 (1) ,57-73.

â- Norris, Freud. "Rush International Accounting high and low financing concept. 11

September 2009. The New York Times website. July 13.

â- Christopher Cox. The United States to the international accounting rules. "The DealBook system. August 27

In 2008. The New York Times website. July 11, 2009.

â- CPAJ. "Certified Public Accountant" magazine. "Business Week". November 2008. BX, network. July 16, 2009.

<Http://bx.businessweek.com/ifrs/view?url=http% 3A% 2F% 2Fviewer.zmags.com% 2Fsho

wmag.php% 3Fmid% 3Dwwsqsp% 26pageid% 3D51% 23% 2F 2Fpage50%>.

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