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IFRS and US GAAP - Convergance Difficulties

May 12, 2008

Analysis of:The Beginning of the End of GAAP | www.cfo.com

1. Given all of the differences between US GAAP and IFRS it will be a few more years before convergance occurs. 2. There is a lack of conformity with respect to adherance to IFRS as it has been promulgated into law. As such, it is difficult to review a financial statement completed under IFRS unless you know the underlying accounting policies promulgated by a specific governmental authority. 3. Bank assets (loans) and derivatives continue to be a matter of controversary in the IFRS world. 4. The SEC will continue to push for convergance. It is probable that IFRS will move closer to US GAAP, especially with respect to providing more descriptive disclosures. Re-valuation of current assets and the disallowance of deferrred tax assets will also cause major issues with respect to accepting IFRS in the US. Asset impairment is an area where great improvement must occur for acceptance by the FASB.

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