Adoption of International Financial Reporting Standards (IFRS)
by US Companies can change the role of finance professionals. On
November 14, 2008, the SEC released its proposed roadmap for that
adoption of IFRS in America thus affirming SEC concentrate on moving
towards global accounting standards.
Within the Roadmap, the SEC didn't set a definitive adoption date, but instead established several milestones that, if achieved, can lead to the necessary utilization of IFRS by US issuers starting in 2014. Early adoption is permitted for that qualified companies for that period ending as soon as December 15, 2009.
Following would be the major highlights from the roadmap-
SEC Roadmap
* 2009- Early adoption permitted for qualified companies for periods ending December 15, 2009
* 2011-SEC will assess the success of early adopters and progress from the pre-defined mile stones.
* 2014- IFRS declaring large accelerated filers for Fiscal years ending on or after December 15, 2014.
* 2015- IFRS declaring accelerated filers for Fiscal years ending on or after December 15, 2015
* 2016- IFRS declaring non- accelerated filers for Fiscal years ending on or after December 15, 2016.
Whatever the date US companies have to adopt IFRS, within the near-term it's possible to see continued convergence between US GAAP and IFRS accounting standards, then ultimate conversion to IFRS.
A contract between your Financial Accounting Standards Board ("FASB") and also the International Accounting Standards Board ("IASB"), known as the Memorandum of Understanding ("MoU") pledges to enhance both US GAAP and IFRS in 11 major topical areas for example revenue recognition, leasing, consolidation, financial instruments, debt and equity. The results of those accounting changes reach beyond just financial reporting.
We feel the adoption is inevitable and would be also within the welfare of investors and firms because they move towards just one group of robust global accounting standards ensuring better transparency across nations.
Steps to become taken by US Companies to obtain IFRS Ready
-Understand the modification - CEOs and CFOs of companies ought to know concerning the impact of IFRS around the entity because the change affects not only fiscal reports but additionally other regulatory, legal or operational obligations that depend on financial reporting.
-Perform a preliminary assessment - Hire IFRS advisors to complete an in depth as well as in depth assessment around the current process and practices.
-Impact on foreign subsidiaries - Consider how new adoption of standards will influence business across international boundaries. There can be a necessity to re-visit long-term strategies, international taxation, financing along with other processes.
-Corporate GRC (Governance, Reporting and Compliances- Starting early is paramount to prevent huge costs later.
-Solid planning - Companies have to think about the temporary and long-term effect of conversion and make a timeline to effectively integrate them into existing processes.
-Impact of IFRS upon us Companies Better transparency.
-Initial assessment difference in GAAP and IFRS accounting is essential inside a company
-Advanced accounting and economic climates required for IFRS accounting
-Transitioning will need large amount of work for example upkeep of dual ledgers, better information and reporting systems and increased costs
While IFRS implementation is centered on public companies, soon private companies will adopt too should they have overseas subsidiaries, foreign based operations or foreign based investors etc.
http://goarticles.com/article/Summary-of-International-Financial-Reporting-Standards-IFRS/5989563/Within the Roadmap, the SEC didn't set a definitive adoption date, but instead established several milestones that, if achieved, can lead to the necessary utilization of IFRS by US issuers starting in 2014. Early adoption is permitted for that qualified companies for that period ending as soon as December 15, 2009.
Following would be the major highlights from the roadmap-
SEC Roadmap
* 2009- Early adoption permitted for qualified companies for periods ending December 15, 2009
* 2011-SEC will assess the success of early adopters and progress from the pre-defined mile stones.
* 2014- IFRS declaring large accelerated filers for Fiscal years ending on or after December 15, 2014.
* 2015- IFRS declaring accelerated filers for Fiscal years ending on or after December 15, 2015
* 2016- IFRS declaring non- accelerated filers for Fiscal years ending on or after December 15, 2016.
Whatever the date US companies have to adopt IFRS, within the near-term it's possible to see continued convergence between US GAAP and IFRS accounting standards, then ultimate conversion to IFRS.
A contract between your Financial Accounting Standards Board ("FASB") and also the International Accounting Standards Board ("IASB"), known as the Memorandum of Understanding ("MoU") pledges to enhance both US GAAP and IFRS in 11 major topical areas for example revenue recognition, leasing, consolidation, financial instruments, debt and equity. The results of those accounting changes reach beyond just financial reporting.
We feel the adoption is inevitable and would be also within the welfare of investors and firms because they move towards just one group of robust global accounting standards ensuring better transparency across nations.
Steps to become taken by US Companies to obtain IFRS Ready
-Understand the modification - CEOs and CFOs of companies ought to know concerning the impact of IFRS around the entity because the change affects not only fiscal reports but additionally other regulatory, legal or operational obligations that depend on financial reporting.
-Perform a preliminary assessment - Hire IFRS advisors to complete an in depth as well as in depth assessment around the current process and practices.
-Impact on foreign subsidiaries - Consider how new adoption of standards will influence business across international boundaries. There can be a necessity to re-visit long-term strategies, international taxation, financing along with other processes.
-Corporate GRC (Governance, Reporting and Compliances- Starting early is paramount to prevent huge costs later.
-Solid planning - Companies have to think about the temporary and long-term effect of conversion and make a timeline to effectively integrate them into existing processes.
-Impact of IFRS upon us Companies Better transparency.
-Initial assessment difference in GAAP and IFRS accounting is essential inside a company
-Advanced accounting and economic climates required for IFRS accounting
-Transitioning will need large amount of work for example upkeep of dual ledgers, better information and reporting systems and increased costs
While IFRS implementation is centered on public companies, soon private companies will adopt too should they have overseas subsidiaries, foreign based operations or foreign based investors etc.
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