AC201

1
AC201 IFRS Supplement Chapter 3

• Regulatory Environment

2
Objectives

• Organizational Structures
• Spread of IFRS
• US vs. Foreign Reporting Environment

3
FASB IFRS Separated at Birth?
FAF Financial Accounting Foundation
Intl. Acct. Standards Committee Foundation
FASAC
EITF
SAC
IFRIC
FASB
IASB
4
Alphabet Soup Slide of Organizations

• IASCF International Accounting Standards
  Committee Foundation
• SAC Standards Advisory Council
• IFRIC International Financial Reporting
  Interpretations Committee
• IASB International Accounting Standards Board
• FAF Financial Accounting Foundation
• FASAC Financial Accounting Standards Advisory
  Council
• EITF Emerging Issues Task Force
• FASB Financial Accounting Standards Board

5
The Global Move Towards IFRS
Canada 2009/11
Europe 2005
United States (2011?)
China 2007
Japan(?)
India 2011
Brazil 2010
Chile 2009
South Africa 2005
Australia 2005
6
US GAAP IFRS

• Used by both Public and Private companies
• SEC Mandates the use of GAAP in Public Companies
• Used by subsidiaries of Foreign based
  multinationals in the US
• Different Countries have their own version of GAAP

• Used by 15,000 listed companies overseas
• Another 12,000 planned by 2011
• Used by subsidiaries of US based multinationals
• Used by SEC foreign registrants
• IFRS is used by listed companies in over 100
  jurisdictions

7
US Reporting Environment

• Weak Company laws
• Strong enforcement (SEC)
• Tradition of strict, detailed accounting
  standards
• Audited Financial Statement publication only done
  by public companies

8
IFRS Reporting Environment

• Often Strong Company laws
• Weak to Moderate enforcement
• Less prone to litigation
• Diverse Auditing cultures and standards
• Many private companies must publish financial
  statements
• In some countries, ALL companies must report