What is the impact of some businesses using International Financial Reporting Standards (IFRS) instead of generally accepted accounting principles (GAAP)? In your opinion, should there be a worldwide convergence of accounting standards? Why or why not? Explain.
Do you think that convergence will ever take place given that it's been worked on for years now? What do you think it will take to get to full convergence, or do you think it will ever happen?
One thing to clarify first, it will be a dream that accounting standards convergence will happen now or in the future, the reasons you will know as the discussion goes on as under.
In many countries now, IFRS are being adopted but not directly, well yes they are not adopted directly but with slight modifications to suit with the economic conditions of that particular country. And also this are not yet made 100% but are being made mandatory on a shift basis based in turnover. This will make the comparision difficult between entities following IFRS and GAAP's. The only impact is comparability.
Convergence of standards is great because it will make the globalisation more liberal LOL. But as already said it is only a matter which will be seen in books but not in practical. Most of the nation's won't allow complete compliance of IFRS as of today's economic situations.
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