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US Accountants and IFRS

U.S. accountants are waiting to see what set of standards they'll be required

Accountants working for companies that only operate in the United States are, like the CFOs running them, awaiting guidance from the Securities and Exchange Commission about whether they will have to start reporting under the International Financial Reporting Standards.

Moving to universal rules would bring multinational companies a huge sigh of relief - they currently have to maintain two sets of books for complying with both IFRS and the U.S. Generally Accepted Accounting Principles. But for U.S.-only corporations, it would mean having to learn a new standard and change systemic reporting practices.

With approximately 120 countries using IFRS, a number that could grow to 150, the SEC's decision is "critical," Robert Hodgkinson writes for Global Financial Strategy News.

"For the world's largest capital market to decide to adopt IFRS would clearly have a profound effect on the global financial reporting environment," he notes.

While the bulk of the arguments for and against U.S. adoption of IFRS center on the costs, Hodgkinson says it is primarily a political decision. An SEC decision in favor of IFRS, if made soon, could have a major impact and influence other countries to also adopt the standard. If everyone is using one set of accounting standards, the world could see "increased international comparability" and maintain the United States' position "at the heart of global reporting," he predicts.