The International Accounting Standards Board introduced a slimmed down set of International Financial Reporting Standards last week for small and midsized businesses, but many companies in the U.S. are probably not likely to drop GAAP anytime soon.
Still, the 230-page set of standards in
On the other hand, until the SEC approves the roadmap for transitioning to IFRS, most companies are not likely to adopt IFRS, even though the AICPA has recognized the IASB as an official accounting standard-setter. Most public companies are going to wait for the SEC to approve the roadmap, a question that has not been resolved ever since Mary Schapiro took over as chair of the SEC early this year.
Private companies are free to adopt IFRS, but as an
Indeed, Western Europe is likely to be the first place where well see small private companies starting to switch over to IFRS for SMEs, and where well see any problems that develop.
If the smaller set of standards does catch on in the U.S. among privately held businesses, that trend could help ease adoption of IFRS by larger companies. But its more likely that the large public companies will move to IFRS before their smaller private counterparts do.
In any case, dont throw out your old collection of GAAP standards just yet, even if your bookcase is yawning under the weight of them. FASB didnt produce its official codification just for the heck of it, and its certainly not ready to jettison GAAP just yet. Even if IFRS for SMEs does prove useful for U.S. companies, GAAP will still be around to provide guidance and answer questions about the matters that the slimmed-down set of standards does not address.