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C C O U N T I N G
& A U D I T international accounting
I N G
Twenty Questions on International Financial Reporting Standards
By Heidi Tribunella
nternational Financial Reporting Standards (IFRS) are issued by the International Accounting Standards Board (IASB), which was created in 2001. Previously, the International Accounting Standards Committee (IASC), founded in 1973, issued International Accounting Standards (IAS). When the IASB was created, it adopted the IAS and continued the work of the IASC. The IASB is working to harmonize accounting standards throughout the world to improve financial reporting for the global financial markets. The following are 20 common questions related to IFRS.
1. What Is the Current Status of IFRS Adoption in the United States? Since November 2007, the SEC has allowed foreign companies to file their financial statements prepared on the basis of IFRS. No reconciliation to U.S. GAAP is required to be filed by these foreign companies. More recently, on August 27, 2008, the SEC released a proposal for public comment that could require mandatory adoption of IFRS beginning in 2014 (updated on November 14, 2008). The mandatory adoption could be phased in depending on company size. The proposal allows the largest public companies to adopt IFRS for periods ending after December 15, 2009. It will be voted on in 2011 (“AICPA Supports SEC Proposed Roadmap for Transitioning to IFRS for Public Companies,” The CPA Letter, September 2008). 2. How Many Countries Have Adopted IFRS? To date, 85 countries have adopted IFRS. Another four require only select companies to use IFRS. Israel, for example, requires IFRS for all companies except 32
banks. Twenty-four countries permit the use of IFRS. This means that 113 countries either require or permit the use of IFRS. Central and South America are moving toward IFRS, as well (“Use of IFRSs by Jurisdiction,” IAS Plus, Deloitte, iasplus.com/country/useias.htm).