Learning Outcomes

  • Explain the convergence movement

The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally, and in particular, the effort to reduce the differences between the GAAP, and the IFRS. Convergence in some form has been taking place for several decades, and efforts today include projects that aim to reduce the differences between accounting standards.

The goal of and various proposed steps to achieve convergence of accounting standards has been criticized by various individuals and organizations. For example, in 2006 senior partners at PricewaterhouseCoopers (PwC) called for convergence to be “shelved indefinitely” in a draft paper, calling for the IASB to focus instead on improving its own set of standards.

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As of early 2020, 166 countries were using IFRS and only one was using GAAP. For an interactive list of IFRS by jurisdiction, visit: Use of IFRS Standards.

As time goes on, convergence will be an interesting movement to watch and see as details are worked through towards creating that single set of accounting standards.

Practice Questions