IFRS in the Curriculum: U.S. Perspective

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IFRS in the CurriculumU.S. Perspective

• Gary K. Meek
• Oklahoma State University
• Deloitte/FSA Faculty Consortium
• May 15-16, 2008
• Chicago

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Where Might IFRS be Covered?

• Undergraduate Level
• Principles I
• Intermediate
• Advanced (Consolidations)

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Where Might IFRS be Covered?

• Undergraduate Level
• Principles I
• Intermediate
• Advanced (Consolidations)
• Graduate Level
• Financial Accounting Research
• Theory
• Financial Statement Analysis
• International Accounting

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IFRS Coverage at OSU

• Principles I
• GAAP-free Little or no impact.

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IFRS Coverage at OSU

• Principles I
• GAAP-free Little or no impact
• Intermediate
• The text has some discussion of the IASB, IFRS,
  and the differences between U.S. GAAP and IFRS.
• Here is what I do (Intermediate I)
• Standard-setting IASB and the Convergence Project

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IFRS Coverage at OSU

• Intermediate
• Here is what I do (continued)
• The nature of standards principles-based versus
  rules-based
• The proposed Conceptual Framework
• Differences in principles
• Extraordinary items on the income statement
• Fair value for PPE
• LIFO
• Development costs
• Terminology differences

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IFRS Coverage at OSU

• Intermediate
• Take-away point
• Students are being sensitized about IFRS at the
  present time.

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IFRS Coverage at OSU

• Intermediate
• Take-away point
• Students are being sensitized about IFRS at the
  present time.
• Advanced (consolidations)
• Taught from the perspective of the converged
  standards on business combinations
• FAS 131(R) 160
• IFRS 3 (R)

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IFRS Coverage at OSU

• Financial Accounting Research
• Side-by-side comparison of U.S. GAAP and IFRS on
  selected issues
• Theory
• -0-
• Financial Statement Analysis
• One or two cases on U.S. GAAP/IFRS differences

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IFRS Coverage at OSU

• International Accounting
• One session (out of 10) on Global Accounting and
  Auditing
• IASB/IFRS
• IFAC/ISA
• But IFRS pop up in other places
• Accounting in Europe
• Financial reporting by multinationals

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The Future

• The question appears to no longer be if but when
  will the U.S. join the rest of the developed
  world in adopting IFRS, as issued by the IASB.
• -Another large accounting firm

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The Future

• There are few differences in broad principle
  between U.S. GAAP and IFRS.
• But there are differences in rules and
  substantial scope for differences in
  interpretation.
• How long do we need to concern ourselves with the
  differences?

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The Future

• Until the differences go away
• Undergraduate Intermediate
• Students are now being sensitized about the
  differences between U.S. GAAP and IFRS.
• In the future, they will be sensitized more.

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The Future

• Until the differences go away
• Undergraduate Intermediate
• Students are now being sensitized about the
  differences between U.S. GAAP and IFRS.
• In the future, they will be sensitized more.
• The solution lies with textbooks (supplements not
  the answer).
• NOW U.S. GAAP, and how different from IFRS.
• I WISH IFRS, and how different from U.S. GAAP.

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The Future

• Until the differences go away
• Graduate level
• Instructors have and take more flexibility in
  teaching IFRS.
• Issues in Accounting Education (November 2007).

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The Future

• Whither the International Accounting Course?
• Are cross-country differences in financial
  reporting still a relevant topic?

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The Future

• Whither the International Accounting Course?
• Are cross-country differences in financial
  reporting still a relevant topic?
• Nearly 100 countries currently require or permit
  the use, or have a policy of convergence with,
  IFRS.
• -
  IFRS Web site

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IFRS Around the World
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The Future

• Whither the International Accounting Course?
• Current Content
• Development and Classification (1)
• Comparative Accounting (3)
• Global Accounting and Auditing Standards (1)
• Reporting and Disclosure (1)
• Foreign Currency Translation (1)
• Financial Statement Analysis (1)
• Planning and Control (1)
• International Taxation and Transfer Pricing (1)

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The Future

• Whither the International Accounting Course?
• It is a misconception that IFRS will make the
  current diversity go away.

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The Future

• Whither the International Accounting Course?
• It is a misconception that IFRS will make the
  current diversity go away.
• Europe
• IFRS in Europe applies only to the 7,000 to 8,000
  listed companies.
• Roughly 3,000,000 non-listed companies arent
  directly affected.
• Individual-company financial statements in code
  law countries will still be prepared using local
  requirements.

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The Future

• Whither the International Accounting Course?
• It is a misconception that IFRS will make the
  current diversity go away.
• Europe
• IFRS in Europe applies only to the 7,000 to 8,000
  listed companies.
• Roughly 3,000,000 non-listed companies arent
  directly affected.
• Individual-company financial statements in code
  law countries will still be prepared using local
  requirements.
• Other countries have local versions of IFRS.

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The Future

• Whither the International Accounting Course?
• It is a misconception that IFRS will make the
  current diversity go away.
• Convergence does not mean that the International
  Accounting course has lost its relevance in the
  curriculum.

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IFRS in the CurriculumU.S. Perspective

• Thank you!
• Questions?