A New Paradigm of Reporting

The Basics of International Financial Reporting Standards

Deborah L. Lindberg, DBA, MBA, CPA, and Deborah L. Seifert, PhD, CPA, CMA

The acceptance of International Financial Reporting Standards (IFRS) for the preparation of financial statements for publicly traded companies is gaining momentum. The SEC began allowing foreign private issuers to use iFRS in SEC filings without reconciling to U.S. GAAP effective for periods ending after November 15, 2007. The SEC has said it may require U.S.-based public companies to convert to IFRS beginning by 2014. IFRS, issued by the London-based International Accounting Standards Board (IASB) is currently used for public reporting purposes in more than 100 countries, and it is estimated that approximately 150 countries will have adopted IFRS by 2012. This new reporting reality has spurred U.S. companies and the SEC to assess the implications of adopting the international standards.