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March 21, 2011


Ron Ratliff


Your article highlights several excellent points but the most telling, in my opinion, is the (mis)concept(ion) held by those in favor of IFRS that a level playing field exists out there in the real world - particularly when it comes to the issue of standards.

I suspect that the key fallacy in the pro-IFRS argument is the belief that there is such a thing as a "common accounting system" only exists in academia - certainly not out here in the real world.

Steven Lazar

Hey Tom,

I'm an undergrad accounting student and I really have enjoyed your last few articles on this situation. My professors believe is IFRS is inevitable and we (the students) should accept that it will be adopted during our careers. Hearing your point of view (especially the line about varying degrees of enforcement and how the united states should individually seek out the most appropriate accounting guidelines for itself) This 'IFRS is inevitable' mindset loosening finally being countered for me. I hope to read more from you.

Steven Lazar

Jonathan Hamilton

It is amazing that most of the talk focuses on convergence when really the points you bring up shouldbe focused on and/or addressed.


Hi Tom,

It is really an interesting discussion that you are driving on. I've been working in Russia for many years and now moved to Europe - still see that everyone everywhere (Russia and Europe, I mean) is really enjoying IFRS. I'm not able to convince that US GAAP (in my opinion in the most of the parts) are better. That makes me believe that I'm in the minority. Do you have any reliable links to show prons and cons of IFRS as the best set of standards instead of US GAAP as they are currently exist? Principle based accounting seems more attractive but it gives too much flexibility to companies that does not help users to analyze what's happening.


Tom Selling

Hi, Aleksey:
You have put your finger on a major issue. GAAP is clearly more detailed than IFRS. However, I do not believe that either set of standards are adequately founded on principles.
I do not presume to advise the EU or Russia as to what accounting standards best suits their capital markets; my opinion is pretty much restricted to the U.S. -- where my education and experience inform me that IFRS adoption would be a significant step backwards for financial reporting.

Intrinsic Value

Hi Tom,
I think the convergence of IFRS and GAAP will be inevitable. However it will not be a smooth process. My background is Finance, not accounting so I cannot comment on the nuances, but the current CFA program is heavily emphasized that convergence is expected.

Daniel Stulac

Why not require US GAAP in all regulated markets?
We can call it International standards if that will satisfy the French. US GAAP as regulated by the SEC is the most promulgated and enforced standard in the world.

If the international comunity wants a say lets appoint some to FASB. There are numerous Ivory tower guys at the Big 4 firms. Put some foreign ones on the FASB.

Personally my experience (at the Big 4) is that the standard is US GAAP and there are many competent non US academicians at these firms.

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