Summary
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 US GAAP effective for periods ending after Nov 15, 2007. In comparing IFRS to US GAAP, it is important to note that international standards are often more conceptual in nature than US standards, requiring more reliance on professional judgment and less reliance on detailed rules. IFRS is often described as being relatively more principles-based, whereas US GAAP is described as rules-based. IFRS, on the other hand, indicates that if the lease contract transfers substantially all of the major aspects of the asset from the lessor to the lessee, then the lease should be treated as a capital asset. Some have described this as bright lines for GAAP versus indicators for IFRS when determining whether leases should be capitalized or recorded as operating leases.
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Extract
A New Paradigm of Reporting
The acceptance of International Financial Reporting Standards (EFRS) for the preparation of financial statements for publicly traded companies is gaining momentum. The SEC began allowing foreign private issuers to use EFRS 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 EFRS beginning by 2014. EFRS, issued by the London-based International Acco...
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