With the implementation of new international accounting standards, it is believed that public companies around the world will be able to attract more foreign capital and that ultimately the global economy will benefit. These new standards, called the International Financial Reporting Standards (IFRS), have already replaced existing systems in over a hundred countries, with the rest set to follow shortly.
Canada recently moved away from its version of generally accepted accounting principles (GAAP) in favour of these new international financial reporting standards. The global economy’s biggest player, the United States, has been slower to embrace the change and is still considering the benefits and timeframe involved. Many have questioned the value of transitioning to or converging with IFRS, considering the costs associated with the adjustments that would need to be made. While developing countries could certainly stand to benefit from IFRS – or indeed the adoption of any national accounting system at all – developed countries have had more to consider.
But the growing interconnectedness of the world’s economies has inspired the development of a single set of international accounting standards, which, when adopted on a large scale, could facilitate freer investments across borders and help developing countries move forward. The International Accounting Standards Board (IASB) issued these standards as a way to promote transparency in financial reporting and make it easy for potential investors to compare the figures generated by public companies.
Along the way to IFRS, companies are bound to encounter stumbling blocks and difficulties – in fact, when evaluating the case studies provided by other countries it becomes apparent that many companies have underestimated the depth and extent of such shifts in their accounting methods.
IFRS Support has worked hard to ease that transition for North American companies by offering comprehensive, professional services and ongoing support once the new standards have been implemented. Whether a business is in the process of converging with these international financial reporting standards or adopting them outright, IFRS Support will simplify the move from the current GAAP system.
IFRS represents the new global standard of international accounting and requires the kind of careful, cost-efficient guidance that an independent financial consultancy like IFRS Support can provide. For more information on the differences between GAAP and IFRS, visit www.ifrssupport.net.