Wednesday, May 28, 2008

Who's Thinking IFRS and Who's Not?

International Financial Reporting Standards (IFRS) may be the wave of the future, but U.S. companies say that swell is still pretty far from the shore, which is fortunate because they don't have many surfers ready to ride that curl.

A recent survey from Deloitte asked U.S. corporate financial professionals if their firms would use IFRS along with or instead of GAAP, if given the choice by the Securities and Exchange Commission.

About a third of the financial professional said they'd consider adopting IFRS, if they could, 10% said they didn't know enough about it, 18% were undecided and 42% wouldn't use it if they could.

Companies may not want to adopt IFRS, but clearly, those surveyed think others may do so. Half the financial professionals predicted at least a quarter of U.S. firms would be using IFRS within the next seven years.

"The industries with the most interest in adopting IFRSs were financial services, health services, and consumer and industrial products," Deloitte says. "This is not surprising: because many competitors in these industries are non-U.S. companies [and] U.S. companies in these industries may be more inclined to consider adopting IFRSs because some of them may fear being at a competitive disadvantage."

Not surprisingly, the companies said they don't have the personnel to make a conversion to IFRS. "Of those companies considering IFRSs," Deloitte says, "64 percent say they lack skilled resources in their U.S. operations while 34 percent believe they lack skilled resources in their non-U.S. operations. These results indicate that more training in IFRSs is required."

It also won't surprise anyone to hear that Deloitte has "thousands of IFRS-experienced professionals" in its global network. It also has an IFRS Resource Library on its Web site, and an IFRS University Consortium to help schools add IFRS materials to their accounting courses.

If all the IFRS discussion has you thinking maybe you need to pick up some expertise, the American Institute of Certified Public Accountants has its own Web site dedicated to IFRS knowledge, including a backgrounder, self-study courses, workbooks and a list of reasons why GAAP continues to be the "gold standard" of accounting in the U.S. and around the world.

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