June 30, 2011
Upon further review, I conclude that US GAAP is in fact superior to IRFS for many reasons. Therefore eliminating GAAP and replacing it with IRFS would be a mistake. GAAP has been refined carefully for many years. IRFS is relatively new, and is still in an early evolving state.
I agree that it would be a good thing to have one world wide set of accounting principles, with carefully thought out reporting rules which would reduce the alternative choices now allowed, wich would help reduce earnings manipulation.
However, having the SEC mandate that US firms be forced to switch to the less developed IRFS has it backwards. IRFS should be the one adapting to US GAAP. Both could slowly assist each other towards the goal of one unified system.
Changing US GAAP where the change is better than what was replaced is progress. Change just for convergence does not make sense.
In this economy, adding costs to US businesses is contra-productive.
Let's not rush into this enormous change right now.