The impact of the convergence on IFRS

In order to have one set of accounting regulations around the world, the Securities Exchange Committee (SEC) in the United States (US) asked the International Accounting Standards Board (IASB) to work in conjunction and attempt to minimize the differences between the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles in the United States (US GAAP). The two different sets of standards, IFRS and US GAAP, generate a lot of differences in various fields, such as financial statement presentation, revenue recognition, business combinations, etc. This paper introduces the history of the convergence between US GAAP and IFRS. In addition, this paper also summarizes the advantages and disadvantages to investors and companies regarding to the convergence. Finally, it concludes that such analysis will allow users and accounting majors to better evaluate and understand the impact of the convergence.