Hamornization of Accounting Standards

Foreign countries often have reporting standards that differ from those in the United States. What are some of the main reasons why reporting standards are different? In light of the differences, do you agree or disagree that harmonization of accounting standards is efficient? Provide examples of ways in which accounting standards have been harmonized. Based on your own external research, how will the IFRS integration work effectively?

There is a variety of factors that can be attributed to varying reporting standards in foreign countries vs the US. These include different histories, values, cultures, and political and economic systems and different stages of economic development.

Notwithstanding the challenges to harmonization which warrant very serious consideration, I still think the benefits of harmonization outweigh the negatives/challenges. The world is now a global village and thus global accounting standards are not only ideal but necessary. Examples of expected benefits from harmonization are comparability of information thus making decision making easier for international investors, time and money that is currently spent in reconciling divergent financial statements will be saved and the general level of accounting standards will improve with harmonization due to synergy effects.

It seems to me it is no longer a question of whether harmonization is necessary but how to implement it. Several examples already illustrate that the F.A.S.B and IAS.B are determined to make the harmonization happen albeit at a slow pace. To date the F.A.SB and I.A.S.B have worked on convergence projects on topics such as fair value measurement, revenue, business combinations and leases. Also another example is Canada which previously used its own accounting standards and has since adopted international accounting standards. This shows that people are getting on board with the idea of one set global accounting standards.

In terms of how the IFRS integration would work...