Accounting... a winning solution

This is essentially a comment on Fraser's post but it got long and I wanted to put a hyperlink on.

US vs IFRS accounting standards is exactly the topic that PWC's xACT case competition (the one that Wenhold and I did well in the last 2 years) has covered. Fraser summed up the differences between the 2 systems in a beautifully succinct way.

A key thing to remember is that US GAAP started as a principles based system and evolved into what is essentially a rules based systems with statements from oversight bodies, judicial decisions, etc. So essentially we are hitting the reset button (like you do when you're getting your butt kicked in a video game).

There are many big challenges that we will face when this transition starts. PROBABLY, companies will provide reconciliations (comparisons) so that investors can compare the old and the new. This will be hard and time consuming. Most companies will only go back 3 years, making it virtually impossible for investors to have sufficient information to go off of.

For a better solution, the one we proposed in the case competition to be specific, I just put up the executive summary as well as our PowerPoint slides here. For your reference should you want to look at this, it is based upon a fictional country called Slobia which has virtually identical demographics to that of the US but is significantly smaller. Personally, I think it's a very good 2 page word doc summary of the problems facing US GAAP and a creative approach to transition to IFRS.