IFRS (International Financial Reporting Standards) are now required or accepted in over 120 countries. The U.S. Securities and Exchange Commission revised its rules in December 2007 permitting non-U.S. companies to file financial statements prepared according to IFRS without reconciliation to U.S. generally accepted accounting principles (GAAP) if the financial statements are prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB). On a 1 to 10 scale (1=very unlikely, 5=neutral, 10=very likely) how likely is the U.S. to accept IFRS for financial reporting by U.S.-based publicly traded corporations?
IFRS is basically a more principles-based US GAAP. Changes in US GAAP lead more or less to changes in IFRS. Personally, I think SEC could accept that more or less because IFRS is US GAAP more or less. As long as it is a US based company why should they report in IFRS? The difference is not that large. I think 3
I will say an 8 when the IFRS is more or less the same as US GAAP. Of course, at that time it will not matter much.
In my opinion, SEC will not accept this change. If we review history of standard setting in both the US and international context, we comprehend FASB has an undeniable effect of standard setting over all the world. Even one of the main causes of forming IASC and IASB are EC and other developed nation's reaction to US standard setting. In my opinion, norwalk committee was a phase to achieve an agreement between US and international standard setter (agreement between anglo- saxon and continental approach). I don't expect more agreement in near future. As a person lives in Asia and knows US financial reporting regime from his studies, my opinion is 2.
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