Fasten your seatbelt for new accounting standards. The demise of Generally Accepted Accounting Principles in the United States (U.S. GAAP) in favor of a set of global accounting standards is inevitable. International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) are the likely choice for eventual conversion by U.S. companies. While the debate is ongoing about the timing and scope of conversion to IFRS, what is clear is that rest of the world is moving forward.

There are substantial differences between IFRS and U.S. GAAP. U.S. GAAP is largely rules-based meaning long and complex standards attempting to deal with all scenarios. Financial Accounting Standard No. 133 on derivatives is a fine example with over 800 pages of the standard and implementation issues. On the other hand, IFRS is a principles-based accounting system, meaning it is objective-oriented allowing for more presentation freedom. Companies are well advised to start thinking about IFRS now and educate themselves on likely ramification such as anticipated M&A activity involving foreign companies, new ERP investments, and securing long-term expertise.

Topics covered include:

• Overview of IFRS
• Brief history of IFRS
• Standards setter and authoritative literature
• Why is it important?
• US acceptance
• Conceptual differences between US GAAP and IFRS
• IFRS Framework
• Comparison of differences
  • Financial statements and financial statement components
  • Consolidation
  • Business Combinations
  • Revenue Recognition
  • Expense Recognition
  • Assets
  • Liabilities
  • Equity
  • Derivatives
  • Other topics
• A look at an IFRS financial statement