The Article “Closing the GAAP” written by Mark K Conny and Published by Enzinearticles on November 22, 2011 analyses the due process and benefits of moving from GAAP-Generally Accepted Accounting principles to the IRFS-International Financing Reporting Standards. The author presents the plans made by US companies requiring that each of them adopts the IFRS by the year 2015 once those plans are approved. The author points out that even though no date has been set yet everyone should be ready for what he refers to as done deal and notes that although differences do exist between IRFS and US GAAP progress is underway to iron them out(Conny, 2011). My take is that the author has presented the facts in a relevant and tidy way.
In writing this article the author relied heavily on The Norwalk Agreement signed in the year 2002 between the accounting standards setters and regulators in the US FASB-Financial Accounting Standards Board and their counter parts in Europe IASB-International Accounting Standards Board which sought to formalize the commitment of the two bodies to work towards the harmonization of the US GAAP and IRFS.
Multinational companies or those wishing to setup businesses across the globe would find this article very helpful by learning that they would no longer be expected to conform to the two standards like before. Indeed, in the year 2006 SEC dropped the requirement that companies affiliated to the US should adopt the US GAAP if they had already adopted IRFS. Even though the article is not very expansive on the major differences of the two standards it does give an insight of what needs to be harmonized.
In summary, I feel that the author has managed to articulate the progress and the great benefits to be reaped after the convergence of accounting principles which he has demonstrated that they outweigh the cost of implementation.
Reference
Conny, M. K. (2011). Closing the GAAP. Retrieved on 30/11/2011, from <http://ezinearticles.com/?Closing-the-GAAP&id=6703504>
