Convergence with Accounting Standards

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) set out to complete their ambitious goal of convergence before the year of 2015. The author provides an outline of these efforts, emphasizing the importance and ramifications of International Accounting Standards (IAS) as a means to globally improve quality and clarity of financial reporting across financial sectors. An extensive review of pertinent literature is given, visualizing the two-pronged approach of converging global accounting standards while continuing to improve the US Generally Accepted Accounting Principles (US GAAP).
As no significant agreement has been implemented since 2008, the main areas of interest to this date remain income tax, revenue recognition, leases, and financial instruments. The present work puts in perspective the roadmap by the Securities and Exchange Commission (SEC), whilst assigning pivotal roles in the harmonization process to Certified Public Accountants (CPAs) and Chief Financial Officers (CFOs). The author offers a conceptual framework and strategies for the successful completion of the convergence project, adding special emphasis on business mergers and taking a strong position on the active involvement of major players and stakeholders.