IFRS is the standard for financial reporting used by many countries except in the United States, where U.S. GAAP (generally accepted accounting principles) is followed. As the business community shrinks, and even local companies are finding themselves pursuing global markets, there is now a sense of urgency for the U.S. to adopt IFRS in order for the U.S. financial reports to be comparable with those of the other countries. As the growth in global financial markets, global commerce, acquisition of U.S. companies by corporations outside of the U.S., and multinational corporations having subsidiaries both inside and outside of the U.S., continues, it will become more important than ever for the U.S. to adopt IFRS.
While this is currently intended for implementation by publicly-held companies, it is expected that a “trickle down” effect will impact every business. Efforts are under way for a simplified version of IFRS that would apply for small and medium sized, privately-held entities. As the convergence between GAAP and IFRS continues, we will keep you informed, especially if your financial reports will be undergoing any significant change in format or reporting style or if we believe there will be any meaningful impact on your company.