U.S. Accounting Standards Going Global?

A plan outlined yesterday by the Securities and Exchange Commission (SEC) could lead to the use of International Financial Reporting Standards (IFRS) by publicly listed U.S. companies, including insurers, beginning in 2014. The Commission said it would make a decision in 2011 on whether adoption of IFRS is in the public interest and would benefit investors. For decades, publicly owned U.S. companies have reported to the SEC using Generally Accepted Accounting Principles (GAAP). However, more than 100 countries around the world, including all of Europe, currently require or permit IFRS reporting. Approximately 85 of those countries require IFRS reporting for all domestic, listed companies. The SEC says a common accounting language around the world would give investors greater comparability and confidence in the transparency of financial reporting worldwide. However, some U.S. experts believe that the new standards will be more complicated and less useful to investors. For more on this story, check out today’s article in the Wall Street Journal by reporters Kara Scannell and Joanna Slater. The I.I.I. update on accounting provides further information.  

Leave a Reply

Your email address will not be published. Required fields are marked *