There's been a lot of chatter about IFRS out there recently, and it all seems to boil down to two themes: (a) It's coming, and (b) we're not ready.
Take a recent AICPA survey, for example. In it, CPAs recognize that the IFRS movement is gaining momentum, but they're still “waiting to invest more resources in international standards until they see a clear signal from the Securities and Exchange Commission about future U.S. adoption.”
That might be the reason why the AICPA is urging the SEC to go slow on IFRS adoption.
“Our research indicates that companies will need five years preparation time to adopt IFRS if the SEC requires two years of historical comparative financial statements,” the AICPA stated in a comment letter to the SEC. “If only one year of comparative financial statements is required, a four-year transition period would be needed to adopt IFRS.”
So the overriding opinion seems to be this: Let's take a reasoned approach to bringing IFRS to our shores.
There's just one problem: IFRS is already here. So says Peter Margaritis, anyway.
Margaritis, chair of the Ohio Society of CPAs' Executive Board and president of IFRS Education and Training, LLC, says IFRS has snuck into the United States “through the back door” thanks to foreign entities that either (a) obtain control of U.S. entities, (b) exhibit significant influence over U.S. entities, or (c) simply begin operating within U.S. borders. Many times, those foreign entities are already preparing their financial statements in accordance with IFRS, and they bring it with them to the States.
“The SEC is proposing the earliest possible implementation of IFRS would begin in 2015 or later. However, the number of current sightings of IFRS in the U.S. is growing and will only increase as we approach mandatory implementation,” Margaritis writes in “Waiting for IFRS? It’s already here,” an article originally published by the OSCPA. “… The time to prepare is now. Firms and businesses that are proactive will have financial leverage and advantage over their competitors.”
So what's the answer? Gear up for IFRS now, or wait for word from on high?
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