HOW INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) WILL CHANGE THE GAME FOR FINANCIAL ANALYSIS AND FINANCIAL ANALYSTS

A paper presented at the Sam Houston State University 4th Annual General Business Conference
in April 2012

Abstract

Robert B. Matthews
Ronald J. Daigle
Paul Anthony Vanek

The Securities Exchange Commission and Financial Accounting Standards Board are engaged in an effort which could transform prescribed accounting principles from generally accepted accounting principles based on historic costs, as developed in this country (US GAAP), to a worldwide standard, quite likely based upon international financial reporting standards (IFRS) promulgated by the International Accounting Standards Board and currently applicable, to varying degrees, in places outside the United States of America. Depending upon the final resolution of issues currently being analyzed and evaluated, a change could take effect as early as 2015 or 2016. Much discussion has obviously focused on the implications for accountants, but financial analysts must also understand the implications of such a change. This paper reviews the history and current status of efforts in this country to converge US GAAP to IFRS, identifies differences between US GAAP and IFRS, and discusses potential implications for financial analysts and others who analyze financial statements and other financial information for a host of purposes...

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