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Recent events and public statements from various accounting constituencies suggest that International Financial Reporting Standards (IFRS) might be adopted in the United States within the next several years.

The intensified focus on convergence makes the future of the U.S. Financial Accounting Standards Board (FASB) somewhat uncertain and means that public companies currently reporting under U.S. Generally Accepted Accounting Principles (GAAP) would have to shift to IFRS. While many of the accounting principles are similar, changing the standard would involve a significant administrative headache for many U.S. companies.

The U.S. Securities and Exchange Commission (SEC) recently finalized rules allowing foreign companies to submit financial information using IFRS without reconciling the information with U.S. GAAP. Shortly after this change in policy, several key players in the U.S. accounting system – including the FASB chairman – discussed the situation in a public forum and unanimously agreed that the global economy would be better served by following IFRS. The SEC is expected to announce within the next six months whether it will allow U.S. companies to use international standards, bringing an end to U.S. GAAP.