"Under the lead of the International Accounting Standards Board (IASB), already more than 100 countries, most notably the European Union and many Asian economies, have either implemented International Financial Reporting Standards (IFRS) or plan to do so. So far, the United States has been a holdout. But the winds are changing. On November 15, 2007, the U.S. Securities and Exchange Commission (SEC) -- which up to then was requiring foreign companies to either report using Generally Accepted Accounting Principles (GAAP) or to reconcile to them -- announced that it would promote international compatibility by allowing foreign companies to access U.S. capital markets while reporting under IFRS. At the same time, the SEC is contemplating changes that would grant domestic firms the choice between reporting under GAAP or IFRS."This change would lower reporting costs by making reporting more consistent.
Is this positive or negative? Probably positive if we can extend the evidence from a new paper by Daske, Hail, L, and Verdi. The authors
"analyze the effects on market liquidity, cost of equity capital and Tobin's q in 26 countries using a large sample that includes over 3,800 first-time adopters [and] find that market liquidity increases around the time of the mandatory introduction of IFRS. The results for firms' cost of capital are mixed but there is evidence indicating an increase in equity valuations. Partitioning our sample, we find that the capital-market benefits exist only in countries with strict enforcement regimes and institutional environments that provide strong reporting incentives."
While it will be interesting to see if the same impact is felt in the US (my guess is we won't as we already have a strong accounting system--but maybe some through reduced accounting costs?), but we will see soon enough). See, accounting and finance do go together very nicely.