All of that has changed — and it is quite dramatic — with two events. First, the International Organization of Securities Commissions (IOSCO) approved IFRSs for cross-border securities offerings in global capital markets in 2000. Then, in 2002, the European Union took the bold decision to require IFRS for all companies listed on a regulated European stock exchange from 2005. These events began a snowball roll, to the point where today about 100 countries require IFRS or a national word-by-word equivalent for all companies or most publicly traded companies. In October 2002, the FASB and the International Accounting Standards Board (IASB) announced the issuance of a Memorandum of Understanding (“Norwalk Agreement”) which is an important step in formalizing their commitment to the convergence of U.S. and international accounting standards. One of the main objectives of the IASB and the IFRS Foundation, under which the IASB works, was almost from the beginning to involve the United States. In a plenary address to the 2002 World Congress of Accountants, Paul Volcker, the Foundation`s first president of directors, said: “I don`t think it`s reasonable today to take the position that U.S. GAAP should be the de facto norm for the world. On the contrary, the International Accounting Standards Board, of which I am the agent, is now working closely with national standards around the world to find common solutions to today`s accounting challenges. The aim is to reach consensus on clearly defined principles, and I am pleased that the US authorities are in favour of this objective. In this opinion, Paul Pacter, a former member of the International Accounting Standards Board (IASB), describes the results of the 2002 convergence project led by IASB and FASB.
He says many standards have converged, and IFRS has been improved as a result of the process. The SEC provided information on the SEC`s status for the introduction of IFRS in the United States. The IASC-U.S. Comparison Report, 2nd ed. (1999), a large study on international accounting standards and GAAP is available from fasB.