FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

Summary/Abstract: While IFRS had been gaining adherents on a slow but steady pace for many years, 2009 was a true watershed in that over 7,000 publicly traded companies in nations of the European Union were required to begin reporting group (consolidated) financial statements using IFRS, world-wide vastly increasing the total number of companies employing international standards. Other nations have recently either embraced IFRS, announced plans to do so, or are endeavoring to “converge” their national GAAP with IFRS. The US standard-setting body, FASB, agreed on a program to converge with IFRS in 2002, and in the past several years a number of US GAAP standards have been modified to conform to their IFRS equivalents (and several international standards have been modified to converge to US GAAP equivalents, where that was deemed appropriate). Most recently, the US securities regulatory authority, the SEC, has agreed to accept filings by foreign private issuers (i.e., foreign registrants in the US) with financial statements prepared in conformity with IFRS, making wider acceptance of IFRS in the US a near certainty - perhaps signaling the ultimate superseding of US GAAP by IFRS. With these developments and prospective events in mind, IASB issued a comprehensive standard on “first-time adoption”, IFRS 1, in mid-2003. This topic should be very attractive also for Romanian economy that will turn into IFRS in a few years.

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