IFRS and GAAP Convergence

IFRS and GAAP Convergence

Describe what accounting convergence means and assess the likelihood of the convergence being completed and implemented in the next five (5) years

Accounting convergence regards the reduction of difference that has been intended and existing over the passage of time. Accounting convergence implies the establishment of a defined set of rules and regulations regards the field of accounting and also calls for reducing the existing differences prevalent between the U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

As of today, accounting standards and their convergence have now become a growing concern and a serious bone of contention that not only make way for progress, but also has become important considering the dynamics of financial and accounting reporting, changing drastically over the period of time.

In line with the recurrent changes and the challenges that are being experienced in the long-run, it becomes evident that not only accounting standards are being observed, but also the kind of relevant outcomes and results that are associated with accounting standards show positive signs as per the requirements that are being observed over the long-run (Bragg, 2004).

Considering the latest efforts that have been intended over the years, the last amendment and contribution that has been intended in line with accounting convergence was the induction and the introduction of the Group of 20 leaders (G20 countries), who would invest their efforts and their concentration in the field of reducing the occurrence of the accounting standards and also would be able to make way for progress.

Evaluate and describe the single most important difference between U.S. GAAP and IFRS rules, and explain your answer

While there are multiple differences and facets that exist between U.S. GAAP and the IFRS rules, the most basic difference is the time interval that are involved in the development and establishment of producing financial statement under a given timeframe.

Time and the constraints associated with it play a pivotal role in the development of these statements, marking the financial standing and the overall business portfolio that required detailed study and analysis in order to be posted and made way for progress and development in the long-run.

To individually assess how it works for in line with GAAP and IFRS, GAAP pertains to observe a minimal one-year timeframe. The public limited companies, under the influence of GAAP, is obliged to make way for observing SEC rules that not only makes way for observing strict deadlines in terms of financial statement and their submission, but also calls for the compiling and completing all other standards of financial statements and their reporting in a three-year period that has been mentioned and ended on the balance sheet.

On the other hand, considering the rules that have been intended in line with IFRS, the information of financial performance and the overall standing of a company would primarily be attributed to a comparative analysis (Clark and Lorensen, 1990).

The comparative information reaped and extracted from this company's financial closure and opinions would have to ...