The podcast is an interview between a Deloitte moderator and D. J. Gannon who is the leader of the IFRS Center of Excellence, Deloitte & Touche LLP and Joel Osnoss a partner and leader of the of the Global IFRS Service Line , Deloitte & Touché LLP. They discuss the issues that have risen since the United States since the securities and exchange commissions (SEC) ruled toward the use of International Financial Reporting Standards (IFRS) instead of the common U.S Generally Accepted Accounting Principles (GAAP) (Deloitte Insights podcast, 2008).
First, they discuss the general context of the new accounting principle. They highlight that most countries all over the world have been using this accounting principal for the longest time possible. In addition, they highlight that many companies have been adapting this new accounting system and therefore the time is perfect for U.S based companies to join as well.
Secondly, they discuss the differences between the two accounting standards. The first difference is the volumes of guidance. IFRS has is briefly represented compared to GAAP which is represented by piles. Another difference is the international standard offers fair value basis in case you need to value an asset. The IRFS minimizes differences in principles and concept whereas the U.S GAAP is too detailed and requires a lot of procedure and dedication (Deloitte Insights podcast, 2008).
The next topic in discussion is the reason behind many companies changing to the international standards. The reason that stands out the most is these companies are international. In some regions, it is a requirement to follow the international standards so it becomes easier for most to adopt the method.
Finally, they highlight the advantages and disadvantages of adopting the international standards for U.S companies. The ramifications at stake will be getting all the companies to adopt the new standards. The second is the time spent in changing the attitude of accountants as well as educating them on the new system. Notably, the advantages make more impact than the disadvantages. The first is that all financial accounts are to be standardized (Deloitte Insights podcast, 2008). Second, individuals will be able to understand the financial accounts of different company regardless of their base. This is because, there before, the U.S GAAP versions were so many, and investors could not understand financial statements of other companies therefore discouraging investment. It also offers an avenue for global standardization of global accounting systems.
In conclusion, despite the risk involved of achieving consistency, the benefits out weight the risks by far. It is therefore advised the U.S companies change the negative attitude they have towards this new change. This is because it will present more opportunities than harm.
Works cited
Deloitte Insights podcast. Transcript: Gearing Up for Change: Why U.S. Companies
Could Benefit from International Financial Reporting Standards, 2008. Web. 24
June 2008.
