In this class we study U.S. Generally Accepted Accounting Principles (GAAP). In Chapter 2, you read about the qualities of information that make it useful. Over the years, U.S. GAAP was developed separately from International Financial Reporting Standards.
In today's competitive world, global capital markets are demanding one common set of accounting standards. This research project requires you to summarize the current state of International Financial Reporting Standards (IFRS) and the likely role they will play in U.S. accounting.
Go to http://www.ifrs.com/Backgrounder_Get_Ready.html to find the answers to most of the questions required in this research project. There are numerous resources for you. Every major accounting firm has information about international reporting standards. In addition, the SEC (www.sec.gov) and the International Accounting Standards Board (www.iasb.org) have information on their website.
This paper should answer the following questions. You should write a paragraph for each question. Use APA format:
Describe briefly what is the role of the International Accounting Standards Board?
Describe briefly what is the role of the U.S. Financial Accounting Standards Board?
What are the benefits of having one world-wide standard for financial reporting?
The Securities and Exchange Commission has currently accepted International Financial Reporting Standards for foreign companies but not US. listed companies. As a manager of a large public company, what concerns would you have if IFRS replaces U.S. GAAP?
If the FASB accepts IFRS for all entities, do you believe accounting information will become more useful? (Refer to the qualities of information found on pages 57-60)
In addition, students should select 2 of the following questions:
How are the FASB and IASB standards enforced?
How might the US and IFRS converge on the issue of LIFO accounting for inventory?
What is the timeline (roadmap) presented by the SEC to converge with IRFS? Do you believe it is a reasonable schedule?
What is the difference between principles based and rule based accounting? Which approach would be better for investors?
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