Reading Financial Reports For Dummies, 3rd Edition

Chapter 20

Creating a Global Financial Reporting Standard

IN THIS CHAPTER

Developing uniform global financial reporting standards

Seeing who benefits from standardization

Examining the differences between reporting systems

As more companies operate globally, the need grows for common financial reporting rules. Today many global companies must prepare financial statements in every country in which they operate, to meet each country's reporting requirements. They also must keep the books according to U.S. generally accepted accounting principles (GAAP) rules (see Chapter 18), if the company is a U.S. company, and must meet the standards of the International Financial Reporting Standards (IFRS), or possibly other standards set by government officials in the country in which they're based.

Financial regulatory institutions plan to meld the standards at some point in the future. Today more than 100 countries use the IFRS as the public reporting standard. The IFRS may be used in almost every country, including the U.S, if the company is based in another country. In this chapter, I explore why a move to develop a global public reporting standard is underway, and I introduce you to the ...