Empirical test on the removal of reconciliation requirement from IFRS to US-GAAP

Chunhui Liu and Grace O'Farrell

International Journal of Managerial and Financial Accounting, 2010, vol. 2, issue 2, 123-133

Abstract: On March 4, 2008, Release No. 33-8879 adopted by the Securities and Exchange Commission (SEC) went into effect and eliminated the need for US-listed foreign companies who prepare financial statements in accordance with IASB-IFRS (International Financial Reporting Standards as issued by the International Accounting Standards Board) to reconcile their financial statements to US-GAAP (US Generally Accepted Accounting Principles). Former studies based on data before 2005 revealed significant differences between IFRS reported measures and US-GAAP reported measures and found Release No. 33-8879 to have been premature. This study updates the literature on differences between IFRS and US-GAAP with recent data and studies convergence between IFRS and US-GAAP by evaluating IFRS vs. US-GAAP comparability in reported net income and net assets from 2004 to 2006. The evidence of convergence is identified.

Keywords: accounting standards convergence; international financial reporting standards; IFRS; generally accepted accounting principles; GAAP; US-GAAP; international accounting standards board; IASB; net income; net asset; accounting harmonisation; Securities and Exchange Commission; SEC; index of comparability; European Union; EU. (search for similar items in EconPapers)
Date: 2010
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