Advanced Corporate Accounting | Report

Running head: ADVANCED CORPORATE ACCOUNTING
Advanced Corporate Accounting
Name of the Student
Name of the University
Author’s Note

1ADVANCED CORPORATE ACCOUNTING
Table of Contents
Requirement (c)...............................................................................................................................2
Requirement (d)...............................................................................................................................3
Requirement (e)...............................................................................................................................4
Requirement (f)................................................................................................................................5
References........................................................................................................................................6

2ADVANCED CORPORATE ACCOUNTING
Requirement (c)
The substitution of Generally Accepted Accounting Principles (GAAP) by the
International Financial Reporting Standards (IFRS) is a controversial issue since the United
States (US) is not agreed to do so. There are certain reasons for this which is discussed below:
1. The first and primary reason for not adopting IFRS by the FASB in the US is the cost
involved in switching to IFRS from GAAP. The switching cost is very high and it
involves additional costs for users and workforce training, system changes and others
(Tickell, Rahman and Alexandre 2013).
2. Another major reason is comparability of financial statements as FASB believe
comparability of financial statements may not be attained with IFRS standards. This can
lead to the development of interpretative differences because of the application of IFRS
by people living in different countries.
3. FASB also believes that superior financial standards are lacking in IFRS since the
financial standards of IFRS are not in accordance with the quality of the financial reports
developed as per GAAP. IASB is putting effort to make IFRS equal to GAAP (Ehoff Jr
and Fischer 2013).
4. The complexity level of GAAP is high, but this is suitable for the US. As per the US,
there is no need for any additional financial standards when GAAP is working fine in the
financial reporting of the country.
5. There are certain flows in the standards of IFRS and this is preventing the US from
adopting IFRS by replacing GAAP. As per the US, there must be improvements in the
financial standards of IFRS in order to adopt by them (Lin and Fink 2013).