What is the trend of converting from GAAP to IFRS?
In order to define the trend of converting from GAAP to IFRS more precisely, let me begin by juxtaposing GAAP and IFRS. GAAP and IFRS are two separate sets of accounting standards used in different countries of the world. Although both GAAP and IFRS have the same goal—to ensure that financial reports are transparent, informative and useful to present and potential investors and creditors—they use different general approaches to do so. Using a rule-based approach, U.S. GAAP lays out detailedguidelines for different circumstances. However, even with 20,000-plus pages of specifics, it can never have a rule and standard for every potential situation (Mitra 2). In addition to lacking completeness of circumstances, critics of GAAP have noted that it also fails to address what explicitly cannot be done like fraud (Battelle & Battelle LLP 10). A prime example used to display GAAP’s imperfections is the Enron scandal. Enron reported all its financials in accordance to GAAP, but used GAAP’s faul
