Accounting & Auditing | Corporate Finance & Governance | Legislative / Regulatory

GAAP is dead … long live GAAP?

GlobalThe SEC says U.S. issuers could be using international financial reporting standards by 2014, but the convergence of IFRS with U.S. generally accepted accounting principles could be completed years earlier than that.

The Financial Accounting Standards Board and the International Accounting Standards Board have released a report in which they outline their goal of completing their convergence projects by 2011.

"I believe that delivering on that goal will bring significant improvement to both U.S. GAAP and IFRSs in areas that are important to investors," said FASB Chair Robert Herz. "We also will decide by the end of the year whether to modify the short-term convergence program to enable a sharpened focus on the major improvement efforts. This reflects our continued commitment to work together to develop a single set of high-quality international accounting standards."

But don't write off GAAP just yet. In "Vive le GAAP,"'s Sarah Johnson says the U.S. accounting principles aren't going anywhere ... at least for the time being.

"The term 'generally accepted accounting principles' and the metrics and ratios it generates are embedded in many places outside of SEC regulations, including state rules, tax policies, and companies' own contracts with their employees and lenders," Johnson writes. She then quotes Amy Greer, a partner in Reed Smith LLP's securities and litigation enforcement group, as saying that "the largest of U.S. companies, which may be able to use IFRS for their SEC filings as early as next year, will still have to reconcile their financial results with GAAP as other areas of the U.S. financial reporting system play catch-up to the regulator."

Is GAAP history? Let us know what you think, then check out these other IFRS resources:


Bill Sheridan