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Multinational, Domestic Companies Weigh IFRS Implications

Domestic companies say adopting IFRS will result in costly changes for them.

Many CFOs and accountants are likely counting down the days until a final decision is reached on whether the United States will adopt the International Financial Reporting Standards.

As Robert Bruce writes for Deloitte, many companies have submitted their opinions to the Securities and Exchange Commission, with arguments citing potential costs or the lack of need for domestic reporting that reflects the IFRS.

However, Bruce points to comments from public pensions plan CalPERS, which said that the current systemic uncertainty is more expensive in the long run.

"The parameters of financial reporting and the reach of organizations in the U.S. which will be affected by the upcoming SEC decision are huge," he writes. "They extend from the global giants to sizable companies which operate in the U.S. market alone."

Solely domestic companies are in many instances dreading the idea of having to switch from the U.S. Generally Accepted Accounting Practices to IFRS, and U.S. businesses are not alone in their dilemma. Today Online reports that businesses that are Singapore-incorporated listed companies need to adopt the standards by 2012, but many have been challenged by the financial and time costs. Larger corporations in particular may have a hard time transitioning to more complex accounting systems, according to the source.