Print Сite this

When the Wind of Change Blows: The Accounting Rules in the USA

Because of the continuous globalization process, which involves increasingly more countries, a number of states have to reconsider their basic economical and managerial strategies in their main industries, which leads to numerous problems to be solved within the enterprises of the given states. To solve the complexities that arise in the course of the establishment of the new rules, considerable effort must be applied. Therefore, it is essential to learn which means of applying certain changes to the company is the most efficient and the least painstaking, considering all important factors.

We will write a
custom essay
specifically for you

for only $16.05 $11/page
308 certified writers online
Learn More

One of the recent examples of the change in accounting rules in a certain country was the preparation for the shift of the accounting strategies in the Ford Company, one of the greatest entrepreneurships in the world in general and in the USA in particular. Trying to accommodate the new regulations, International Financial Reporting Standards, or IFRS, supported by 138 more countries where Ford operates (Rapoport), the company director emphasizes that the key idea behind the switch from the present system to the so-called Generally Accepted Accounting Principles, or, to put it short, GAAP, to IFRS is more profitable from the economical viewpoint, since the IFRS system will save a number of costs usually spend on rearranging the current GAAP system into IFRS when trading with the other countries. Hence, a number of problems arise due to the complexity of the adoption of another accounting system.

It is worth mentioning that the government of the USA has been trying to bridge the two accounting systems for years, yet the transition from one system to another appears to be very complicated. It has been estimated that only in 2015 the new accounting rules are likely to be established. In addition, certain large companies like Ford regard the switch to the accounting rules of the other countries as something humiliating for their reputation and even posing a threat to their authority. The reasoning behind the above-mentioned idea is quite simple. The question is why such influential companies as Ford are supposed to follow the systems created in the other countries and offered by the countries consuming the goods offered by Ford. Moreover, the newly adopted rules might hinder the development of smaller businesses, which is also a reason for concern.

Yet there are a lot of positive aspects of the accounting principles change. For instance, the process of accounting is bound to become considerably easier. In addition, the switch to another accounting system will reinforce the global security, since there will be no need to compare the companies from different states.

Hence, constructive strategies of transition from GAAP to IFRS have been developed. The scheme offered to the majority of the companies in the USA allows to use the current GAAP system as the basis for the company’s accounting, yet small changes are supposed to be applied to the GAAP system in certain time periods. Thereby companies will suffer less when moving from GAAP to IFRS. Moreover, the method offered allows to perform the transition from one accounting system to another in a more flexible manner, which is also important from the companies of lesser authority in the USA market.

Anyway, it is obvious that sooner or later, the USA will have to adopt the new rules of accounting. Thus, it is most important to carry out the process of transition from GAAP to IFRS as smoothly as possible. Unless the USA joins the GAAP system, the idea of global marketing will inevitably collapse, which means that the USA should eventually adopt the GAAP rules.

Works Cited

Rapoport, Michael. “U.S. Firms Clash over Accounting Rules.” The Wall Street Journal, 2011. Web.

Get your
100% original paper
on any topic

done in as little as
3 hours
Learn More

Cite this paper

Select style

Reference

StudyCorgi. (2022, April 8). When the Wind of Change Blows: The Accounting Rules in the USA. Retrieved from https://studycorgi.com/when-the-wind-of-change-blows-the-accounting-rules-in-the-usa/

Reference

StudyCorgi. (2022, April 8). When the Wind of Change Blows: The Accounting Rules in the USA. https://studycorgi.com/when-the-wind-of-change-blows-the-accounting-rules-in-the-usa/

Work Cited

"When the Wind of Change Blows: The Accounting Rules in the USA." StudyCorgi, 8 Apr. 2022, studycorgi.com/when-the-wind-of-change-blows-the-accounting-rules-in-the-usa/.

* Hyperlink the URL after pasting it to your document

1. StudyCorgi. "When the Wind of Change Blows: The Accounting Rules in the USA." April 8, 2022. https://studycorgi.com/when-the-wind-of-change-blows-the-accounting-rules-in-the-usa/.


Bibliography


StudyCorgi. "When the Wind of Change Blows: The Accounting Rules in the USA." April 8, 2022. https://studycorgi.com/when-the-wind-of-change-blows-the-accounting-rules-in-the-usa/.

References

StudyCorgi. 2022. "When the Wind of Change Blows: The Accounting Rules in the USA." April 8, 2022. https://studycorgi.com/when-the-wind-of-change-blows-the-accounting-rules-in-the-usa/.

References

StudyCorgi. (2022) 'When the Wind of Change Blows: The Accounting Rules in the USA'. 8 April.

This paper was written and submitted to our database by a student to assist your with your own studies. You are free to use it to write your own assignment, however you must reference it properly.

If you are the original creator of this paper and no longer wish to have it published on StudyCorgi, request the removal.