IFRS Move Will Cost More in U.S. Than It Did in Europe, Study Says

Lora Bentley

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.



Add Comment      Leave a comment on this blog post
Apr 7, 2009 11:11 AM Stephanie Campion Stephanie Campion  says:

"...the GAAP from individual European countries were already similar to IFRS in that they were risk-based"

What a load of rubbish! Have you ever looked at French GAAP? You can't possibly get more rules-based than that. Compared with the changes the French had to make, the changes from US GAAP to IFRS will be tiny!

Reply

Post a comment

 

 

 

 


(Maximum characters: 1200). You have 1200 characters left.

 

null
null

 

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.