Home Volumul 1 IFRS STANDARDS AND THEIR POLITICAL ACCEPTANCE IN EUROPE AND UNITED STATES

 

IFRS STANDARDS AND THEIR POLITICAL ACCEPTANCE IN EUROPE AND UNITED STATES


Miroslav Škoda, Marta Lapková
University of Matej Bel, Faculty of Economics, Department of Finance and Accounting,
Tajovského 10, Banská Bystrica, 974 01, Slovakia, tel. 00421 48 446 63 25,
email address: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Abstract
The year 2005 marked the start of a new era in global conduct of business, and the
fulfillment of a thirty-year effort to create the financial reporting rules for a worldwide
capital market. For during that year’s financial reporting cycle, as many as 7,000 listed
companies in the 25 European Union member states, plus many others in countries such as
Australia, New Zealand, Russia, and South Africa were expected (in the EU, required) to
produce annual financial statements in compliance with a single set of international rules—
International Financial Reporting Standards (IFRS). Many other business entities, while
not publicly held and not currently required to comply with IFRS, will also do so, either
immediately or over time, in order to conform to what is clearly becoming the new
worldwide standard. Since there are about 15,000 SEC-registered companies in the USA
that prepare financial statements in accordance with US GAAP (plus countless nonpublicly
held companies also reporting under GAAP), the vast majority of the world’s large
businesses will now be reporting under one or the other of these two comprehensive
systems of accounting and financial reporting rules.
Most other national GAAP standards have been reduced in importance or are being phased
out as nations all over the worlds are now embracing IFRS. For example, Canada has
announced that Canadian GAAP (which was very similar to US GAAP) will be eliminated
and replaced by IFRS by 2011. More immediately, China will require listed companies to
employ IFRS. It is quite predictable that only US GAAP will (for the foreseeable future)
remain as a competitive force in the accounting standards arena, and even that situation will
be more a formality than a substantive reality, given the formal commitment (and
substantial progress made to date) to “converge” US GAAP and IFRS.
Key words: IAS/AFRS, US GAAP, convergence, aceptance, International Accounting
Standards Board

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