The 2014 edition of IFRS and US GAAP: similarities and differences again highlights the critical need to be financially “bilingual” in the US. Recent estimates suggest that over $7 trillion of US capital is invested in securities of non-US companies, many of whom are IFRS preparers.
For US preparers, public or private, big or small, knowledge of IFRS is equally important. Although a near-term mandatory change to IFRS for US public companies is off the table, IFRS is increasingly relevant now to many US businesses as they engage in cross-border M&A, report to their non-US stakeholders, and manage their overseas operations.
After more than a decade of US GAAP and IFRS coming closer together, the formal bilateral relationship between the IASB and FASB is coming to a close as the Boards complete the remaining joint project on leasing and turn their attention to their individual agendas. The accounting frameworks are similar in many respects, but there remain differences in accounting recognition, measurement, and disclosure requirements. To assist deal-makers, investors and preparers in obtaining, maintaining, or enhancing their bilingual skill, this publication provides a broad under-standing of the major differences between US GAAP and IFRS.
This publication is designed to alert companies to the major differences between IFRS and US GAAP as they exist today and the timing and scope of accounting changes that the standard setting agendas of the International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB) collectively will bring.
This publication considers authoritative pronouncements and other developments under IFRS and US GAAP through September 1, 2014.
We continue to believe in the long-term vision of a single set of consistently applied, high-quality, globally accepted accounting standards. The IFRS framework is best positioned to serve that role. However, acceptance of an outright move to international standards is off the table, at least for now. In the meantime, the FASB and IASB should continue to focus on improving the quality of their standards while preventing further divergence between US GAAP and IFRS.