INTRODUCTION TO IFRS

Introduction to IFRS

In an increasingly interconnected global economy, many market participants are

considering the question of whether it is possible or desirable to move toward a

more uniform global “language” for financial reporting. The proponents of this idea argue that a uniform set of global accounting standards, supported by strong governance, independent standard-setting and a sound regulatory framework, could benefit investors and businesses alike. Others suggest that trying to establish a uniform set of global standards would run the risk of overlooking the unique economic, political, cultural, legal and regulatory realities that exist in different nations and regions.

Over the past decade, this global discussion has intensified. In 2001, the International Accounting Standards Board (IASB) adopted the first iteration of International Financial Reporting Standards (IFRS) to serve as a possible pathway for establishing uniform global accounting standards. Since then, IFRS has been adopted or become accepted in over 100 countries. Over this same period, the Financial Accounting Standards Board (FASB) and the IASB have begun an effort to

converge IFRS and the Generally Accepted Accounting Principles in the United

States (US GAAP), essentially working to make the two sets of accounting standards increasingly similar to each other. More recently, some market participants have raised the possibility of transitioning entirely from US GAAP to IFRS for public company financial reporting in the United States.

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