IFRS and U.S.: Economics or Politics?

• In Event: Breakfast with Research Round Table Forum

Abstract

Over 80 percent of countries in the world now require use of IFRS. Research studies show that IFRS based financial statements have enhanced transparency and comparability leading to lower cost of capital and greater cross-border capital flows. In the US, FASB started the convergence process to align US GAAP and IFRS in 2002, long before IFRS became widespread. Although convergence efforts yielded some notable successes, the process has stalled in recent years as SEC refuses to require or permit domestic companies to use IFRS. There exists a robust demand for IFRS in the US. However, the key to any meaningful progress lies in the political arena.

Authors

• Avinash Arya, William Paterson University

• Priya Nagaraj, William Paterson University