Empirical test on the removal of reconciliation requirement from IFRS to US-GAAP
by Chunhui Liu, Grace O'Farrell
International Journal of Managerial and Financial Accounting (IJMFA), Vol. 2, No. 2, 2010

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.

Online publication date: Thu, 20-May-2010

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