What is Ifrs and Why are International Economics Looking at One Accounting Standard?

The most common bases of accounting are the accrual basis, the cash basis, and the income tax basis.

The cash basis of accounting records transactions when cash is collected or paid.

The income tax basis of accounting is the method used to file your taxes. What is IFRS?

International Financial Reporting Standards (IFRS) is a set of accounting standards, developed by the International Accounting Standards Board (IASB) that is becoming the global standard for the preparation of public company financial statements.

Worldwide Adoption of IFRS

Nearly 100 countries have adapted their local accounting standards to conform to IFRS.

;But why is IFRS so important and why is convergence of accounting standards so advantageous or even necessary?

;International Financial Reporting Standards remove some of the subjectivity from financial reporting and provide a consistent basis for recognition, measurement, presentation and disclosure of transactions and events in financial statements.

;In 2005 the European Union formally adopted IFRS as the single accounting standard throughout their member countries. Canada has committed to adopting IFRS by 2011. Japan, India, Brazil and Mexico are also pursuing convergence or adoption of IFRS.

;A country's intention to adopt IFRS or converge with IFRS is highly admirable and to be applauded. However, the accounting profession, governments, regulators, national accounting standard setters, and other constituents must continue to work together to eliminate differences between national and international standards.

;v;The Accounting Profession needs to assist governments and standard setters in formulating and; enacting convergence plans, provide IFRS training and education and support the preparation of national; language translations of IFRS.

;v;Universities need to include IFRS in the core accounting curriculum.

;v;Analysts and Investors are required to promote convergence of national accounting standards with IFRS.

SEC offers roadmap to global accounting standards

In 2011 SEC would make a final decision whether to adopt IFRS.

"The increasing worldwide acceptance of financial reporting using IFRS, and U.S. investors' increasing ownership of securities issued by foreign companies that report financial information using IFRS, have led the SEC to propose this cautious and careful plan.