Restructuring the Accounting Rules for Restructuring Charges?

IFRS Versus U.S. GAAP

Beixin (Betsy) Lin, PhD, and Rong Yang, PhD

Given that International Financial Reporting Standards (IFRS) are being accepted in more countries around the world and the convergence of IFRS and U.S. Generally Accepted Accounting Principles (GAAP) continues to move forward, the eventual adoption of IFRS in the United States seems more likely with each day. The SEC reaffirmed its support for a single set of high-quality, globally accepted accounting standards as well as the convergence of U.S. GAAP and IFRS in February 2010 (SEC Release 339109, Commission Statement in Support of Convergence and Global Accounting Standards, www.sec.gov/news/press/2010/2010-27.htm). The effects of convergence are significant. Despite the increasing similarities between the two sets of standards, substantive differences remain. It is important to understand the key differences and how the adoption of IFRS may affect the financial statements reported by U.S. corporations.