Accounting is the language in which business is conducted. Each country has historically had its own dialect, with its own unique slang, quirks and idioms. But as the world shrinks and globalization expands, having multiple accounting systems is confusing and inefficient. To overcome these challenges, accounting is undergoing a massive worldwide evolution.
International Financial Reporting Standards (IFRS) is the new global accounting system being implemented worldwide. Approximately 114 nations have already adopted IFRS. All European countries started adoption in 2005, while other countries are changing soon: Canada in 2011, Mexico in 2012 and Japan in 2014. As a result, IFRS has been implemented in more than 12,000 companies, including many subsidiaries of U.S. global enterprises.
IFRS differs in many significant ways with the Generally Accepted Accounting Principles, or GAAP, system known in the U.S. And that has consequences for supply chain managers.
