What impact do international accounting standards  have on U.S.-owned businesses

Discussion topic:
1.      What impact, if any, do international accounting standards (i.e., the International Financial Reporting Standards developed by the International Accounting Standards Board) have on U.S.-owned businesses? On international businesses? Is the impact greater on U.S. businesses in any particular industry, and if so, why?

Student Post
2.      The International Financial Reporting Standards, governed by the International Accounting Standards Board (IASB) are a set of guidelines businesses follow to report their financial activities. Following the standards enables more consistent financial reporting across industries. Because most US businesses have adapted their reporting processes to align with GAAP standards, migrating to IFRS does result in significant changes.
In regards to administrative and accounting changes, IFRS standards presents significant changes in the manner that accounting departments classify, collect, and report their financial information. One is that US businesses are required to follow two distinct sets of guidelines, as they are still expected to follow GAAP guidelines, especially if they provide annual reports to the SEC. If both guidelines are followed, separate reporting is done for accounts, such as inventory, leading to multiple values for net income and expenses. The separate reporting is exhausting from a labor perspective, forcing businesses to increase the headcount in their accounting department, or pay overtime for existing staff to prepare the financial reporting.
IFRS also demands businesses to account to provide an explanation for expenses specified in their income statements by either classifying or adding to the disclosing notes. In addition, assets and inventory cannot be reported under the last-in-first-out (LIFO) inventory method as it is prohibited under IFRS. Reversals of inventory write-downs is also prohibited.
Reference:
Ingram, David. (n.d.). How IFRS Will Affect Businesses? Small Business – Chron.com. Retrieved from http://smallbusiness.chron.com/ifrs-affect-businesses-81857.html

3.      “Differences exist between IFRS and U.S. GAAP with respect to recognition, measurement, presentation, disclosure, and choice among alternatives. In some cases, IFRS are more flexible than U.S. GAAP. Several IFRS allow firms to choose between alternative treatments in accounting for a particular item. Also, IFRS generally have less bright-line guidance than U.S. GAAP; therefore, more judgment is required in applying individual IFRS. However, in some cases, IFRS are more detailed than U.S. GAAP.” (Hernandez, 2019). The answer is yes U.S. companies are affected in various ways when reporting financial statements when it involves a company that is considered having subsidiaries that are global. Walmart, McDonalds and many other companies have businesses all over the world. The importance of the IFRS (international Financial Reporting Standards) is the determination of financial reporting to be fair, honest, and ethical by businesses on a global scale. The industry that is mostly affected by the IFRS is the factories which have details on material and final products based on Lower of Cost or Market rather then net realized value. Companies like Ford, or Home Depot are affected by depreciation and inventory regulations created by the IFRS. Class, what other industries are affected by the detailed regulations of inventory by IFRS.
References:
Hernandez, S. ADVANCED TOPICS IN ACCOUNTING RESEARCH. [University of Phoenix]. Retrieved from https://phoenix.vitalsource.com/#/books/1260144933/