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The Impact of Changing from Local GAAP to IFRS

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The article of Leslie Stevens – Huffman is rather short but it goes straight to the point and tells it as it is. For one, the article pointed out that there’ s no stopping U. S.’ adoption of the IFRS. Because of the rapid deployment and adoption of IFRS in other countries, the U. S. will be left behind in terms of competitiveness in the global market as it finds its share of the capital markets become smaller and smaller. For another, IFRS will not only impact international businesses with head offices in the U.

S., but all public companies are also actually required to convert to IFRS, regardless whether they have international operations or not. Not only that, the resource person, Mr. Smetanka, sees the further deployment of IFRS even to the private companies, and the ultimate “ death of U. S. GAAP” as more and more companies moves towards IFRS. Lastly, the resource person pointed out that, even though the planned adoption is still set in 2014, now is the time to prepare for IFRS as the adoption of these standards entails a lot of work for the companies involved, particularly on educating their people about IFRS and converting their technology to become IFRS-compliant. Global Accounting Firm CEOs on Challenges – Transitioning from GAAP to IFRS, and More by Ellen M.

Heffes A most important viewpoint expressed in the first article is that the adoption of IFRS is not only the responsibility of accountants but the whole company as well. The companies have to plan not only for training their people but also for tweaking their information technology to track and to summarize the needed financial data and reports.

Companies have also to consider the impact of IFRS in their bottom line and profit-sharing, as well as the amount of money they have to invest as they adopt the new standards. Article number two maybe for accounting firms but it also expanded the above viewpoint from the previous article (although the two articles are by no means related to each other). The author started this article by putting in the viewpoint of one particular accounting firm.  

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