Countries around the world all have to follow some sort of guidelines for business and books and keep them in check fair. United States using the FASB (Financial Accounting Standards Board) GAAP (Generally Accepted Accounting Principles) while most of the world uses IFRS (International Financial Reporting Standards). Have more news that covers all the time recently about the convergence of two.The United States is a country that does not use IFRS. Living in the United States we are very aware of how we handle our finances. But how do we know how the other countries to follow their set of rules? Large countries such as Canada, India, and Japan also have rules they must follow in order to maintain their financial order and in accordance with the kind of rule.
For example, Canada is required to use IFRS but Japan and India are still needed to be. Japanese prepare their financial statements in accordance with Japanese GAAP. India also can still use Indian GAAP. Both countries are permitted to use IFRS if they choose to. They are required to use IFRS around 2015 or 2016.Since Canada as close as the state has a large number of companies listed on U.S. companies to do bother to Canada. United State companies use GAAP, but should use IFRS in the year to come.Countries not have the same accounting standards and follow the rules can influence public opinion on a company's finances. Investors may be more effective than companies in various countries if they submit their financial statements in accordance with the same rules as any other. A company may look like a good investment under U.S. GAAP, but under IFRS investment company does not seem to be a good investment anymore.
Americans worried that other countries finances could not up to par with other countries. Worry about is the overall quality of financial statements and how they are reported. Of course there will be the department to implement the policies and guidelines such as the two new, but for the first few years there will be problems that arise because people do not follow all the rules and do not know all the new changes that arise. A change to the extent that it does not happen overnight. But the country is waiting for the United States to set a date that they expect to begin to adopt IFRS. United States has delayed any decision on the change of time. State felt as though the United States will not make a decision in the near future to establish the date of adoption, other countries will follow in their footsteps and do not delay global change.
There ever be one set in stone guidelines for financial statements. Countries have been working in isolation for IFRS. This law will never be exactly the same for everyone. Every state is different. People do not like change and they certainly do not throw out the rule that for next year. Some rules are contrary to the rules of IFRS U.S. GAAP. There must be a commitment to a place and meet in the middle on the definition parts.Some certain people around the world that we should initiate and develop international rules and a new method that everyone can follow the rules, rather than trying to combine both GAAP and IFRS. Which may cause slight headache on both sides. But people in other countries fear the new rules will not be free from the U.S. and supporting them more countries.
This other changes will affect all companies in the report for not only them, but the amount of money they have to spend to build and operate financial statements. Training and education should happen to show employees the correct way of reporting and the new changes will take place. All those in the accounting world are preparing for this change occurred even though most likely will not happen for five years.Everyone know change is upon us. We just have to wait until the progress of the case. After the United States set a date to meet the IFRS, then we will see more and more news about what's to come and what to expect from these guidelines will be a new rule for the accounting industry.