US GAAP vs IFRS

Summary

The video script compares US GAAP and IFRS, the two main global accounting standards, highlighting their development by FASB and IASB respectively. It emphasizes the importance of understanding these standards for investors and professionals, noting significant differences that affect financial analysis and comparability. The script also discusses the principles-based approach of IFRS versus the rules-based US GAAP, their evolution, and the challenges of finding companies that report under both standards, using ASML as a rare example of reconciliation.

Takeaways

• 🌐 **US GAAP and IFRS Dominance**: US GAAP and IFRS are the two main global accounting standards used by publicly listed companies, with US GAAP being the standard in the United States and IFRS being the self-proclaimed 'global standard for global markets'.
• 🏢 **Developing Bodies**: US GAAP is developed by the FASB, based in the US, while IFRS is developed by the IASB, based in the UK.
• 📈 **IFRS Adoption**: Over 144 jurisdictions require IFRS for all or most publicly listed companies, and 12 more permit its use, totaling 156 countries.
• 🌍 **EU and Other Countries' Stance**: The European Union requires IFRS for consolidated financial statements of companies whose securities trade in a regulated market in Europe, while Japan allows voluntary adoption, and China and India have standards that are consistent with or based on IFRS.
• 🔍 **Relevance Beyond Accountants**: The script emphasizes that understanding US GAAP and IFRS is not just for accountants but also important for investors, business leaders, stock market analysts, and others involved in business performance evaluation.
• 📚 **Resources for Understanding**: High-quality documents from SEC, Ernst & Young, KPMG, Deloitte, and PWC, as well as the Finance Storyteller video, are recommended for understanding the similarities and differences between US GAAP and IFRS.
• 🚫 **Comparison Challenges**: Direct comparison of financial performance between companies using different standards (e.g., ExxonMobil using US GAAP and Shell using IFRS) is not possible without reconciliation due to differences in calculation methods.
• 💡 **Reconciliation Example**: ASML, a company listed on NASDAQ and Euronext Amsterdam, provides an annual report based on both US GAAP and IFRS, and their reconciliation shows a difference in net income of around 5%.
• 📉 **Dual Listing and SEC Rules**: The SEC allows foreign issuers to use IFRS financial statements in their reports, which reduces the need for dual reporting but also limits global comparability.
• 📊 **Substantive Differences**: While US GAAP and IFRS have many similarities, there are substantive differences in how revenues, expenses, assets, liabilities, and equity are recorded and valued.
• ⚖️ **Rules-Based vs. Principles-Based**: US GAAP is primarily rules-based, providing specific guidance, whereas IFRS is principles-based, allowing more interpretation and potentially leading to different outcomes for similar transactions.
• 🔄 **Convergence and Divergence**: While FASB and IASB have worked on convergence projects, such as the new revenue recognition standard, there are still areas of significant difference, and the full adoption of IFRS by the US seems unlikely.

Q & A

What are the two main accounting standards used by publicly listed companies worldwide?

The two main accounting standards are US GAAP (United States Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards).

Which organization develops US GAAP and where is its headquarters located?

US GAAP is developed by the FASB, the US-based Financial Accounting Standards Board, which is headquartered in Norwalk, Connecticut.

What is the primary difference between US GAAP and IFRS in terms of their approach to accounting standards?

US GAAP is mostly rules-based, providing specific guidelines, while IFRS is mostly principles-based, offering more general principles for accounting practices.

How many jurisdictions currently require or permit the use of IFRS Standards for publicly listed companies?

According to the IFRS Foundation, 144 jurisdictions require the use of IFRS Standards, and 12 jurisdictions permit its use, making a total of 156 countries.

Why is it not advisable to directly compare financial statements of companies reporting under US GAAP and IFRS?

Direct comparison is not advisable because different accounting standards can lead to different calculations for financial figures like Net Income, making comparisons akin to comparing apples to oranges without adjustments.

What is an example of a company that provides a reconciliation between their US GAAP and IFRS financial statements?

ASML, a leading supplier of semiconductor manufacturing equipment, is an example of a company that publishes annual reports based on both US GAAP and IFRS, along with a reconciliation between the two.

What are some of the high-quality documents that can help understand the similarities and differences between US GAAP and IFRS?

Some documents include the 52-page SEC document from 2011, Ernst & Young's 51-page document, KPMG's 515-page handbook, Deloitte's 72-page publication, and PWC's 237-page guide.

Why is it difficult to find examples of companies that publish financial results for both US GAAP and IFRS?

It is difficult because under the current SEC rules, foreign issuers are allowed to use IFRS financial statements in their reports, and they are not required to reconcile their financial statements with US GAAP.

What is the difference in net income reporting between US GAAP and IFRS for ASML in 2016 and 2017?

In both 2016 and 2017, IFRS Net Income for ASML was approximately $100 million higher per year than US GAAP Net Income, representing a difference of around 5%.

What are some of the substantive differences between US GAAP and IFRS that could affect financial analysis?

Substantive differences include the way revenues and expenses are recorded on the income statement, how assets, liabilities, and equity are valued on the balance sheet, and how cash flow items are classified on the cash flow statement.

What is the current stance of the SEC and FASB regarding the adoption of IFRS by US public companies?

The SEC and FASB have shown hesitancy to relinquish control over accounting rules, and while there may be more convergence projects in the future, a full transition of US public companies to IFRS is considered unlikely.

Outlines

00:00

🌐 US GAAP vs. IFRS: Global Accounting Standards

This paragraph introduces the two primary accounting standards used by publicly listed companies worldwide: US GAAP (United States Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). Developed by the FASB in the US and the IASB in the UK, these standards are crucial for financial reporting. The script highlights the extensive adoption of IFRS, with 144 jurisdictions requiring it and 12 permitting its use, totaling 156 countries. It emphasizes the importance of understanding these standards not only for accounting professionals but also for investors and business leaders when comparing company performance. The paragraph also mentions resources for understanding the similarities and differences between US GAAP and IFRS, including documents from SEC, Ernst & Young, KPMG, Deloitte, and PWC, and suggests a video by Finance Storyteller for an introductory understanding. An example from the oil and gas industry illustrates the difficulty of comparing financial statements of ExxonMobil (US GAAP) and Shell (IFRS) due to different accounting standards.

05:01

🔍 Reconciling US GAAP and IFRS: The ASML Example

This section delves into the challenge of comparing profitability under US GAAP and IFRS, using ASML, a semiconductor equipment supplier, as a case study. ASML is unique in providing both US GAAP and IFRS financial statements, allowing for a reconciliation of the two standards. The paragraph reveals a difference of approximately $100 million or around 5% in net income between the two standards for ASML in 2016 and 2017. Key differences highlighted include the treatment of development expenditures and the recording of income tax expense and deferred tax assets. The script ponders why more companies do not provide such reconciliations and explains that while there are many dual-listed companies, the SEC's rules allow foreign issuers to use IFRS without reconciling to US GAAP, impacting global comparability. It also invites viewers to share examples of recent US GAAP to IFRS comparisons, acknowledging the scarcity of such examples in recent years.

10:05

📚 The Nature of US GAAP and IFRS: Rules-Based vs. Principles-Based

The paragraph explores the fundamental difference between US GAAP and IFRS in terms of their approach to accounting standards. US GAAP is described as rules-based, providing specific guidance and 'bright lines' for accounting practices, whereas IFRS is principles-based, offering more interpretative flexibility. The script uses a family metaphor to illustrate the concepts, comparing rules-based systems to a list of parental dos and don'ts, and principles-based systems to a general expectation of nice and friendly behavior. It discusses the pros and cons of each approach, noting that rules-based standards can lead to companies meeting the letter but not the spirit of the rules, while principles-based standards can result in varied interpretations. The size of the standards is also compared, with US GAAP being significantly larger, reflecting its more detailed rules. The paragraph concludes by acknowledging the dynamic nature of both standards, as they evolve with new industries and transactions, and touches on the ongoing efforts towards convergence between US GAAP and IFRS.

15:08

🛠 Convergence and Divergence of US GAAP and IFRS

This paragraph discusses the potential for convergence or divergence between US GAAP and IFRS. It begins by examining the possibility of US public companies transitioning from US GAAP to IFRS, a notion that has been discussed but is considered unlikely due to the SEC and FASB's reluctance to relinquish control. The script then highlights successful convergence efforts, such as the new revenue recognition standard (ASC606 in US GAAP and IFRS15 in IFRS), which has significantly reduced differences in accounting for revenue. However, it also points out areas where differences remain, such as the new leasing standard (ASC842 and IFRS16), which narrowed but did not eliminate disparities. The paragraph provides examples of areas where US GAAP and IFRS could yield significantly different outcomes, including the measurement, recognition, and valuation of financial instruments, and the valuation of inventory, with a focus on the LIFO (Last In First Out) method, which is acceptable under US GAAP but prohibited under IFRS. The script concludes by expressing skepticism about a full transition to IFRS in the US, likening it to the unlikely adoption of the metric system in the country, and encourages viewers interested in business, investing, and finance to subscribe to the Finance Storyteller YouTube channel.

Keywords

💡US GAAP

US GAAP stands for United States Generally Accepted Accounting Principles. It is the set of accounting standards used in the United States for the preparation of public company financial statements. In the video, US GAAP is highlighted as the standard used in a country with a large and diverse economy and a long history of an active market for stocks and bonds, emphasizing the need for standardized financial reporting to investors.

💡IFRS

IFRS refers to International Financial Reporting Standards. Developed by the IASB, these are global accounting standards designed to provide a consistent approach to financial reporting for public companies. The video discusses IFRS as the 'global standard for global markets' and mentions that 144 jurisdictions require its use, highlighting its widespread adoption and the importance of understanding it for global financial comparability.

💡FASB

FASB stands for the Financial Accounting Standards Board. It is the organization responsible for developing US GAAP in the United States. The video mentions FASB as the body headquartered in Norwalk, Connecticut, and underscores its role in setting the accounting standards that govern financial reporting in the US.

💡IASB

IASB is the International Accounting Standards Board, the organization that develops and maintains IFRS. The video positions IASB as the counterpart to FASB on the global stage, with its headquarters in London, and its mission to create a single set of high-quality, understandable, enforceable and globally accepted accounting standards.

💡Consolidated Financial Statements

Consolidated financial statements are the combined financial statements of a parent company and its subsidiaries, presenting the group as a single economic entity. The video refers to the European Union's adoption of IFRS Standards for the consolidated financial statements of companies whose securities trade in a regulated market in Europe, illustrating the application of IFRS in the context of large economic groups.

💡Voluntary Adoption

Voluntary adoption implies that companies can choose to adopt a particular accounting standard without it being mandatory. The video notes that in Japan, voluntary adoption of IFRS has been allowed since 2010, without a mandatory transition date being established, indicating the flexibility companies have in adopting accounting standards.

💡Accounting Standards Convergence

Accounting standards convergence refers to the process of reducing differences between US GAAP and IFRS to improve global comparability of financial statements. The video discusses the efforts of FASB and IASB to work together on common standards, citing the successful convergence in revenue recognition with ASC606 and IFRS15, effective from 2018.

💡LIFO

LIFO stands for Last In, First Out, an inventory valuation method where the most recently produced items are considered to be sold first. The video points out that LIFO is acceptable under US GAAP but prohibited under IFRS, and it discusses the financial implications of using LIFO, such as potentially lower inventory values and higher cost of goods sold compared to FIFO.

💡FIFO

FIFO is an acronym for First In, First Out, which is the opposite of LIFO and is the inventory valuation method that IFRS requires. The video explains that under FIFO, items that are produced or purchased first are considered to be sold first, which typically results in higher inventory values and lower cost of goods sold compared to LIFO.

💡Convergence Projects

Convergence projects are collaborative efforts between FASB and IASB aimed at harmonizing US GAAP and IFRS to reduce differences and improve the comparability of financial statements globally. The video mentions the mixed results of the leasing standard convergence project, ASC842 and IFRS16, effective from 2019, which narrowed but did not eliminate differences between the two standards.

💡Dual Listing

Dual listing refers to a company having its shares listed and traded on stock exchanges in more than one country. The video discusses the existence of around 500 companies with dual listings, which are allowed by the SEC to use IFRS in their financial statements, impacting the global comparability of financial reporting.

Highlights

US GAAP and IFRS are the two main accounting standards used by publicly listed companies worldwide.

US GAAP is developed by the FASB and is the standard in the United States.

IFRS is developed by the IASB and is considered the 'global standard for global markets'.

144 jurisdictions require the use of IFRS Standards for publicly listed companies, with 12 more permitting its use, totaling 156 countries.

The European Union adopted IFRS as the required financial reporting standard for companies whose securities trade in a regulated market in Europe since 2005.

Japan allows voluntary adoption of IFRS since 2010, without a mandatory transition date.

China has been amending its Accounting Standards to align with IFRS principles.

Indian Accounting Standards are based on and substantially converged with IFRS Standards.

Understanding US GAAP and IFRS is essential for investors and anyone comparing company performance.

High-quality documents from SEC, Ernst & Young, KPMG, Deloitte, and PWC help understand the similarities and differences between US GAAP and IFRS.

Financial ratio and trend analysis between companies using different standards can lead to inaccurate comparisons, as seen with ExxonMobil and Shell.

ASML is an example of a company that provides a reconciliation between their US GAAP and IFRS numbers.

Substantive differences between US GAAP and IFRS can affect financial reporting, such as in the treatment of development expenditures and income tax.

US GAAP is mostly rules-based, while IFRS is principles-based, leading to different approaches in financial reporting.

The size of US GAAP is significantly larger than IFRS, reflecting its more rules-based nature.

Both US GAAP and IFRS are evolving, with new standards emerging to address changes in industries and transactions.

Convergence efforts between FASB and IASB have resulted in common standards, such as ASC606/IFRS15 for revenue recognition.

Differences remain in areas such as financial instruments and inventory valuation, including the use of LIFO under US GAAP versus its prohibition under IFRS.

The likelihood of US public companies transitioning from US GAAP to IFRS is considered low, despite potential benefits.

Transcripts

US GAAP versus IFRS.

US GAAP: United States Generally Accepted Accounting Principles.

IFRS: International Financial Reporting Standards.

US GAAP and IFRS are the two main accounting standards in the world, for use by publicly

listed companies.

US GAAP is developed by the FASB, the US-based Financial Accounting Standards Board headquartered

in Norwalk, Connecticut.

IFRS is developed by the IASB, the International Accounting Standards Board headquartered in

London, United Kingdom.

US GAAP is obviously the standard in use in the United States, a country with a highly

diverse and very large economy, and a very long history of an active market for buying

and selling stocks and bonds, where companies need to synchronize the way they report financial

results to investors.

How many countries use IFRS, the self-proclaimed “global standard for global markets”,

the “global solution for a global need”?

Take a guess!

Here are some maps of various parts of the world with countries that require IFRS in

red, and countries that permit IFRS in green.

According to the IFRS Foundation, 144 jurisdictions in total now require the use of IFRS Standards

for all or most publicly listed companies,

whilst a further 12 jurisdictions permit its use.

So 156 countries in total.

The European Union adopted IFRS Standards as the required financial reporting standards

for the consolidated financial statements of all European companies whose debt or equity

securities trade in a regulated market in Europe, effective in 2005.

In Japan, voluntary adoption is allowed since 2010, but no mandatory transition date has

been established.

China has continued to amend Chinese Accounting Standards so that its principles are generally

consistent with IFRS.

Indian Accounting Standards are based on and substantially converged with IFRS Standards.

So if US GAAP and IFRS are different accounting standards, should this topic only be interesting

for accountants?

Quite the opposite!

Of course, accountants, CFO’s and finance directors need to have the most in-depth knowledge

of how accounting standards work, but many others should have at least a high level understanding.

It is essential for any investor to understand how US GAAP and IFRS work.

It is very important for anybody comparing the performance of companies (business leaders,

stock market analysts, business developers, marketing leaders).

There are several high-quality documents that can help you understand similarities and differences

between US GAAP and IFRS in great detail: the 52-page SEC document from 2011, or more

recent publications like the 51-page document from accounting firm Ernst & Young, KPMG’s

515-page handbook, Deloitte’s 72-page publication, and PWC’s 237-page guide.

Or maybe get the high level idea first by watching

this Finance Storyteller video!

Let’s take an example in the oil and gas industry.

The income statements of ExxonMobil and Shell.

Both companies report their financial results in US dollars, the currency of choice for

transactions in the oil business.

That should make the comparison easy, right?

Revenue at the top: $279 billion for ExxonMobil, $388 billion for Shell.

Net income at the bottom: $21 billion for ExxonMobil, $23 billion for Shell.

Now that we found those two key numbers of revenue and net income for both companies,

we can jump straight into financial ratio analysis for this year, trend analysis over

the past three years, etcetera, right?

No, no, no, no!!!

We would be comparing apples to oranges.

ExxonMobil prepares its financial statements based on US GAAP, Shell prepares its financial

statements based on IFRS.

If the standards you apply are different, the calculation of a number like Net Income

is different.

We have no indication what Shell’s Net Income would have been under US GAAP, nor what ExxonMobil’s

Net Income would have been under IFRS.

Comparing ExxonMobil to Chevron (US GAAP to US GAAP) is apples-to-apples.

Comparing Shell to BP (IFRS to IFRS) is oranges-to-oranges.

But sadly, comparing the financial performance of Exxon Mobil to Shell is not possible without

a lot of rough estimates, wild guesses, and disclaimers.

Is there any way of finding out exactly how much the difference is between US GAAP and

IFRS for one and the same company in the same year, for example in the area of profitability?

I have searched far and wide, but have only found one recent example of a company that

provides a recent reconciliation between their US GAAP and their IFRS numbers.

ONE COMPANY!

ASML, the world's leading supplier of semiconductor manufacturing equipment and the innovator

behind ever-advancing lithography systems.

ASML’s shares are listed for trading on NASDAQ and Euronext Amsterdam.

They publish an annual report based on US GAAP as well as an annual report based on

IFRS, and a reconciliation between the two.

In both 2016 and 2017, IFRS Net Income for ASML was higher than US GAAP Net Income by

around $100 million per year, a difference of around 5%.

Specifically for ASML, there are two main differences: the way development expenditures

are treated under US GAAP (fully charged to operating expense) versus IFRS (capitalized

and then amortized), and the way income tax expense and deferred tax assets are recorded.

This is a very small sample: one company in one specific industry.

The same or different elements of the US GAAP and IFRS accounting standards may cause differences

for other companies.

Who knows….

Why is it not easy to find more examples of companies that publish their financial results

for both US GAAP and IFRS?

There surely must be more companies like ASML that have a dual listing, in other words companies

that have their shares listed in the US (NYSE or NASDAQ)

as well as somewhere else in the world?

Yes, there are plenty of those companies, around 500 to be more precise.

Under the current rules of the US Securities and Exchange Commission (SEC), foreign issuers

(corporations incorporated under the laws of any foreign (non-US) country) are allowed

to use IFRS financial statements in their registration statements and periodic reports!

This saves foreign issuers a lot of time, money and effort as they don’t have to prepare

“dual” annual reports under both US GAAP and IFRS.

But it’s not great for global comparability.

In addition, in November 2007, the SEC unanimously approved a proposal that no longer requires

foreign registrants to reconcile their financial statements with US GAAP, as long as they use

IFRS as issued by the International Accounting Standards Board.

So there are lots of examples of US GAAP to IFRS comparisons for 2006, but few to none

for more recent financial years.

And let’s face it, 2006 in today’s VUCA world is pretty much ancient history.

If you do find a recent example of a company publishing both US GAAP and IFRS numbers,

and the reconciliation between them, then please let me know in a comment below.

So if we can’t start the comparison between US GAAP and IFRS from a sufficiently large

sample of actual differences for real-life companies, let’s take a look at the possible

differences that could occur.

US GAAP and IFRS each provide a way to map economic events onto financial reports: providing

principles, rules and guidance to book accounting journal entries, and put together financial statements.

For most common transactions, there are more similarities than differences between US GAAP

and IFRS.

However, it is important to realize that significant differences in treatment can and do occur.

Some differences are cosmetic.

If we compare the balance sheets of two companies that we discussed earlier, ExxonMobil and

Shell, we find that ExxonMobil (US GAAP) lists assets from most liquid to least liquid, and

Shell (IFRS) lists assets from least liquid to most liquid.

A cosmetic difference: you just have to look in a different place for the information you need.

What is more worrisome is substantive differences: differences in the way revenues and expenses

are recorded in the income statement, differences in how assets, liabilities and equity are

valued on the balance sheet, and differences in how cash flow items are classified on the

cash flow statement.

Let’s zoom out to the big picture on US GAAP versus IFRS.

US GAAP is mostly rules-based, while IFRS is mostly principles-based.

What does rules-based versus principles-based mean?

Here’s a metaphor that viewers with children, or those that grew up with a brother or sister,

might relate to: the two ways to run a family.

Some parents use a rules-based system: they tell their kids which behaviors are allowed

and what is prohibited: you can’t kick or punch your brother or sister, but you may

give him or her a hug.

Other parents may use a principle-based system: “in this family, we are nice and friendly

to each other”.

Is rules-based better than principles-based, or is principles-based better than rules-based?

I don’t think one is better than the other, each has advantages and disadvantages.

With rules, you try to provide clarity and be specific.

The more specific the guidance, the more consistent the application, right?

Or not quite?

Unfortunately, in the case of families, by making a list of rules you might also encourage

children to try things behind your back as a parent, kids might test the “limits”

of the rules, and your list of rules is probably never ever going to be complete to describe

each and every possible interaction between siblings.

An equivalent of this in US GAAP accounting standards is the use of “bright lines”:

when the FASB specifies a percentage as a minimum or maximum for applying a certain

rule, companies might adapt their behavior to just meet the minimum requirements (complying

with the “letter” of the standard, but not necessarily with the “spirit” of the

accounting standard).

With principles, you leave a lot of room for interpretation; different people might each

have their own subjective interpretation of the principle.

Opponents of principle-based structures would say that a lack of detailed rules might lead

to more abuse, and in a business context to different interpretation for similar transactions.

Neither system will be perfect, and it is not easy to find an optimal mix between rules

and principles that works best.

A rules-based standard like US GAAP is definitely more sizable than a principles-based standard

like IFRS.

Estimates of the size of US GAAP versus IFRS vary from 7200 pages of US GAAP (when printed)

versus 1300 for IFRS, to 25,000 pages of US GAAP to 2000 pages for IFRS.

Whether it’s a 6-to-1 ratio or 12-to-1 ratio, rules-based is more extensive.

This remains one of the criticisms of US GAAP by practitioners: a standards overload with

too much detail and a high level of complexity.

It’s important to understand that both US GAAP and IFRS are changing over time.

New industries emerge, new types of transactions occur, and the thinking about how certain

economic transactions need to be treated accounting-wise changes.

Some years, big impact changes in the standards occur.

In other years, the number of changes might be large, but the impact fairly low.

And sometimes things are fairly quiet in the area of standard setting.

So even if you compare numbers for one and the same company over a large number of years,

you might be comparing “various types of apples”.

An interesting question is whether US GAAP and IFRS will converge (grow more close),

or diverge (grow further apart).

The FASB and IASB have been working together over the years to try to develop common standards

in various areas.

A success story in convergence between US GAAP and IFRS is the new standard for recognizing

revenue from contracts with customers,

ASC606 in US GAAP, and IFRS15 in IFRS, effective 2018.

With the exception of a few fairly minor areas, the new model eliminates many of the existing

differences in accounting for revenue between the two frameworks.

As revenue is (for most companies) the biggest line item in the profit and loss statement,

it is great for comparability if recognition of revenue is synchronized between the two

accounting standards.

A project with mixed results is the new standard for leasing, ASC842 in US GAAP, and IFRS16

in IFRS, effective 2019.

While both new standards basically require lessees to recognize right-of-use assets and

lease liabilities on their balance sheets, there are significant differences between

the standards.

The new standards narrowed the differences, but did not eliminate them.

What are some examples of areas where US GAAP and IFRS could yield very different outcomes?

Measurement, recognition and valuation of financial instruments is one such complex area.

Valuation of inventory is another, with the question whether to LIFO or not to LIFO as

a central theme.

LIFO is acceptable under US GAAP, but prohibited under IFRS.

Inventory value on the balance sheet tends to be lower under LIFO (Last In First Out)

than under FIFO (First In First Out), therefore Cost of Goods Sold tends to be higher under

LIFO than under FIFO, and profit tends to be lower under LIFO than under FIFO.

This might sound like a trivial matter, but it makes a major financial difference.

For all companies in the US that still use LIFO, to change to FIFO could generate a one-time

(taxable) profit of tens of billions of dollars.

So will listed US public companies ever be required or allowed to transition from US

GAAP to IFRS?

It was certainly hinted at and discussed in the past.

The SEC and Financial Accounting Standards Board (FASB) have been hesitant to relinquish

control over accounting rules.

There may be more convergence projects in the future, maximizing similarities and minimizing

differences, which effectively bring US GAAP and IFRS closer.

But a full transition?

I think that the US adopting IFRS is as likely as the US converting to the metric system.

Possible, maybe even advisable, but very unlikely.

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