On Again, Off Again: International Financial Reporting Standards

International Financial Reporting Standards

For years, the idea of implementing International Financial Reporting Standards (IFRS) in the United States has been bounced around more than a tennis ball in a dryer. However, the bouncing may have stopped – at least for now.

Recent developments suggest that this set of accounting standards from the International Accounting Standards Board will not be adopted in the United States. Specifically, when the Securities and Exchange Commission (SEC) laid out its strategic plan through 2018, it did not list IFRS adoption as a goal.

However, it did note that “due to the increasingly global nature of the capital markets, the agency will work to promote higher quality financial reporting worldwide and will consider, among other things, whether a single set of high-quality global accounting standards is achievable.”

IFRS training still worthwhile

While the United States won’t be moving away from generally accepted accounting principles (GAAP) anytime soon, it doesn’t mean an investment in IFRS training for your accounting and finance team would not be valuable.

As globalization booms, more and more U.S. organizations are working with vendors in international markets, where the vast majority of jurisdictions do report using IFRS. This is especially true for organizations that often work with European Union-based jurisdictions.

Accounting and finance professionals working for organizations with global offices will also need to be up to date on current information regarding standards and practices. While American branches may report using U.S. GAAP, finance functions are bound to cross waters at some point.

When that happens, organizations will need quick access to IFRS expertise. Consultants well-versed in IFRS can help the business ensure it is meeting foreign reporting requirements, or transition to the new standards if IFRS would be adopted in the United States.

IFRS may not be in the cards for the United States at the moment, but the climate could change. Therefore, financial leaders would be wise to consider having a game plan ready, should the new standards be mandated.

Do you work for an organization that uses International Financial Reporting Standards? Share your insights and experience in the comments section.