Sunday, July 20, 2008

A new era in accounting?

In the battle to set accounting standards for companies across the globe, the United States appears to have lost. More than 100 countries, including Russia, those in the European Union, and soon Canada, have adopted or agreed to adopt the rules set by the London-based International Accounting Standards Board, a group established just seven years ago.

In doing so, they have rejected generally accepted accounting principles, the standard this country has been using for decades. And now that the world has shown a preference for international financial reporting standards, or IFRS, the big question is if, or maybe when, the United States will do the same.

Accountants who read the Securities and Exchange Commission's actions like tea leaves believe the agency will either allow or require public companies to switch as soon as 2011. Doing so would represent a seismic shift in the otherwise staid world of accounting.

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