Accenture says U.S. companies making the transition from U.S. Generally Acceptable Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS) will pay more to make the move than their European counterparts did.
CFO.com reports U.S. companies will spend between 0.1 percent and 0.7 percent of annual revenue to move to the global rules. By contrast, European companies making the switch did so at an average cost of 0.05 percent of revenue. The difference most likely results from the fact that the GAAP from individual European countries were already similar to IFRS in that they were risk-based. By contrast, U.S. GAAP are rules-based.
In addition, the Securities and Exchange Commission has estimated that the first companies making the transition in the U.S. will spend approximately $32,000 on their first IFRS filings. And some of those companies are guessing they will spend even more than that, according to CFO.com. Writer Sarah Johnson points out that the U.S. companies will be responsible for maintaining IFRS and U.S. GAAP simultaneously -- "under the SEC's plan and in order to meet...requirements outside the SEC's purview."
As is typical, smaller companies will be harder hit than larger ones, the story says.