Question

why do you think the adoption of IFRS by United States is remote possibility.

Answer 1

One of the difficulties with the United States adopting IFRS is that LIFO is not allowed under IFRS. The primary reason the LIFO system is controversial is that the last items in inventory tend to age and thus could potentially become obsolete. Also it provides a “tax holiday” to business as they can report lower net income, and consequently pay lower taxes when inventory prices rise and inflation is on the increase.

United States may also resist IFRS as they may not have a market incentive to prepare IFRS financial statements. They may believe that the significant high costs associated with adopting IFRS outweigh the advantages. Furthermore IFRS is not globally accepted. Moreover is prone to manipulation because the businesses can only use the methods that they wish, consequently lead to financial statements show only desired results, which results to profit manipulation