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How Managers Are Dealing with the Switch to Ifrs

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How managers are dealing with the switch to IFRS
Xiaochen Zhang
Texas A&M University-Commerce

Abstract
Recently, there are an increasing number of companies switching from GAAP to IFRS. The subject of this article is mainly about how managers deal with the switch to IFRS. This paper discusses the background of changing standard, and why manager must switch the standard to IFRS. At last, it points out several methods that managers should take in order to switch to IFRS. Keywords: IFRS, GAAP, switch

Introduction International Financial Reporting Standards (IFRS) is a standard accounting system easy to International Accounting Standards Board (IASB) issued by the countries in the cross-border economic exchanges. IFRS is a global harmonization of financial rules to regulate the operation of financial management in accordance with international standards guidelines. For specification worldwide accounting operations of enterprises or other economic organizations, and economic, interests can be protected in a standard, and will not lead to the same calculation methods vary in terms of the criteria arising from unnecessary economic loss. However, now GAAP stands for generally accepted accounting principles and refers to business accounting practices that most U.S. companies use. The switch to International Financial Reporting Standards (IFRS) for all U.S. companies means that both accountants and managers have to learn some new practices. This switch is expected to take three to four years to work its way through the system (Johnston, 2011). Subsequently, the U.S. Securities and Exchange Commission (SEC) made several decisions that led many to wonder whether IFRS might replace GAAP altogether. The most notable of these decisions were the following: On November 15, 2007, the SEC voted unanimously to eliminate the requirement that foreign

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