This article is an intellectual contribution based on verifiable facts and evidence on the ongoing debate on the Adoption of IFRS in the United States of America.

1. 21 REASONS THE UNITED STATES OF AMERICA SHOULD ADOPT IFRS
This issue of whether the US should adopt IFRS has turned to a perennial debate. The US being a
global leader in politics, governance has been operating an economy powered by a Robinson
Crusoe Internally driven financial framework (US GAAP).By its own right USGAAP serves its
purpose, apologist to the anti-IFRS school of thought believes.
We all know about the involvement of Government in the economy of the United States unmindful
of its capitalist and free market Orientation. We know that the SEC, The Legislature and the Courts
play crucial roles in the enactment of Financial Laws in the US and its enforcement to safeguard
shareholders, as seen in the Sarbanes-Oxley act of 2002 which has become a formidable standard in
the Country.
It is understandable that the US has its financial peculiarities which its home-made standards can
tackle effectively. We also know that so does all other countries around the World. The World is
aware that the US has a Strong Capital Market (AMEX),NYSE, but not one without powerful
Competitors i.e. The London Stock Exchange (LSE).We are not ignorant of the claims of very high
quality reporting with US GAAP but we cannot deny the fact that this is the major goal of all
standards ,quality is subjective. Beauty is in the eyes of the beholder. It is simply self-appraisal for the
US to assert that USGAAP is better than Nigerian GAAP or any other GAAP practiced elsewhere.
Remmember, everyone is a Lion in his Den.
Glory, Glory United States of America your Financial System has effective public enforcement, the
truth remains that every country with a government can effectively place controls an enforce the
activities in the Financial Sector of its economy, of which we know that some Countries in the World
has very solid Financial Regulatory framework stronger than what is obtainable in the US.
Sometimes, I listen to established Accounting Personalities in the US who just for selfish reasons,
pathological compulsion to maintain status quo and resist change at all cost, speak terrible things

2. about IFRS. It s sickening. I know that for a large economy like the US, accepting IFRS would not
happen without Conflict and Controversies. Late Prof Claude Ake (2001) rightly said Conflicts and
Controversies are the vehicles of Change and Development . As Intellectuals, this conflict should not
be a conflict likened to two market women quarrelling, or a child throwing tantrums at the parents
for their refusal to buy cheese balls. It should be a Conflict of Superior Argument.

3. Let s take a look at 21 Reasons why, I think the US should adopt IFRS
(1) THE US NEEDS TO REGAIN STRENGTH IN THE GLOBAL MARKET:
It is crystal clear that the US has lost so much in terms of global Investment to other capital
Markets in Europe especially the London Stock Exchange. Investors from other parts of the
World don t come to the US stock exchange markets because of the stiffness of the rules
therein. Adopting IFRS will quickly bring them back and boost the Foreign Direct Investment
(FDI) of the US.
(2)IFRS IS CHEAPER TO IMPLEMENT:
Many apologist to the USGAAP argue that the cost of adopting IFRS may be too demanding
on the US economy, the truth remains that the cost of running,
Implementing and maintaining the US GAAP by far outweighs the initial cost of IFRS
Implementation and running cost of IFRS is negligible when compared to that of US GAAP.
(3) IFRS HAS STRONG CAPITAL MARKET ORIENTATION:
Just like the US GAAP, IFRS was made with the capital market in view. It is tilted towards helping
regulators in the capital market do their job with ease. Though it might not be controlled,
amended at will by regional powers such as the SEC, the American Courts and the Legislature.
IFRS certainly is a growing body and would have answers to emerging issues in Financial
Reporting Worldwide as they come.
(4) COST SAVINGS FOR US MULTINATIONALS:
Adoption of IFRS by the US will help save cost for US multinationals that have subsidiaries and
branches scattered around the World. Preparing their Financial Reports in one single financial
language (IFRS) will save them cost of producing different statements in different standards. For
example Chevron uses US GAAP, in its policies it uses reducing balance method in its depreciation for
the firms based in the US and uses straight line depreciation for its subsidiaries outside the US. This
discrepancies and discrimination makes preparation of the Consolidated Financial Statement hectic
and costly.
(5) COMPARABILITY AND NETWORK BENEFITS:
An International Investor who wants to invest in the Oil and gas Industry and he is bent to chose
two companies from but Gazprom, Saudi Aramco, British Petroleum and Exxon Mobil would not
be able to make a clear, error-free comparison between these firms, if the three reports in
different accounting standards. That is why IFRS is necessary. It makes comparability easy and
Investment decisions flow faster. Adopting IFRS will bring allow the eagle in the Companies
operating in the US to fly. More global attention, better finances etc

4. (6) IFRS IS A WORLDWIDE STANDARD/BENCHMARK:
12,000 Companies in 113 countries have adopted IFRS in some degree and more countries are
continuing to adopt the standard each year with hope of increased comparability of financial
statements (AICPA 2009).The US is a global leader in Politics, it will be bad politics for the US to be
isolated from the rest of the World in Finance and Financial Reporting. Get it clear, it is not
superiority, it is simply resistance to innovation. If the US feels it is not in control of the IASB, It
should go in and play their ball to gain control, isolation here is not only dangerous as stated by
Robert Green in his 48 Laws of Power, it simply means accepting defeat.
(7) 70% OF EVERY US COLLEGE STUDENT UNDERSTANDS IFRS:
In 2009,PWC awarded $700,000 as grants to educational Institutions in the US to help prepare
for IFRS Adoption, ever since many more donations, grants from other institutions supporting
teaching and learning of IFRS in the US has been made available. As we speak today, the US is
very much ready for the adoption of IFRS as bulk of American Accountants, Finance Analyst,
Resource persons already work with IFRS.
(8)IFRS WILL YIELD THE SAME RESULT AS US GAAP:
IFRS is a global standard, it is multi-dimensional, it takes into cognizance the uniqueness of
financial environments, cultures and politico-economic setting in countries, so it is not supposed
to be too concentrated, it is unifying and acts like a weighted average measurement standard to
reconcile the too hot financial settings to the too cold ones therefore asserting that it won t
produce results is a flimsy excuse.
It will yield commensurate and even better results than the former standards used. IFRS
recognizes uniqueness of Reporting environments, that s why it has laid out the principles
for accountants and any deviation from the spirit of those principles or rules will be
sanctioned as hard as the SEC of any country wants it.
(9) IFRS IS EASY TO COMPREHEND AND APPLY:

5. The IFRS is made to be very simple to understand and apply, it is precise and within months any
user will get used to it, this is against the US GAAP which is very complex and too detailed. It
pertinent I let you know that the US GAAP has over 25,000 pages of rules and standards, while
IFRS contains only 2752 total pages. I have been thinking of relocating to the US, may be getting
to work with Merrill Lynch, but once I remember the US GAAP and its volume, my heart beats
faster and also the SOX additional. It s a lot of burden for Interpreters of Financial Statements
there. I don t think this burden is necessary when we have IFRS.
(10) IFRS HAS STRONG INSTITUTIONAL SUPPORT IN THE US:
Most firms in the big four are in support of the US adopting IFRS. This course is championed by
PWC. KPMG, DELIOTTE, EY, American Accounting Association (AAA), AICPA are all in support of
IFRS adoption in the US.
(11) IFRS IS PRINCIPLE BASED:
IFRS was not established to bend anyone s knees, it was established to act as a pro-active check
on window dressing and creative accounting practices and to make sure that, financial
statements represents the true and fair value of the transactions that took place in the firm at
every financial year. IFRS recognizes uniqueness in structure, corporate governance,
environment of firms and gives them room to give a true and fair value of their transactions in
that their unique circumstance. IFRS does not believe in the concept of fielding Hussein Bolt and
Mohammed Ali in a hundred Meters race or bringing Hussein Bolt to the ring come and fight
John Sena. Rule based approaches like that of US GAAP looks to stiff and would not any day gain
universal acceptability.

6. (12)IFRS WILL SHOWCASE THE STRENGTH OF THE AMERICAN ECONOMY:
Adopting IFRS will be a huge advantage for the United States because reporting in IFRS places
every company, every economy on a level playing field, therefore paving way for people to see
the strength in the American economy. As it stands how no one can vividly say that companies in
America are better than those in Saudi Arabia or Kuwait. You can t say Exxon Mobil is better than
Rosneft of Russia even after studying the annual reports, because of the discrepancies in
Standards of Financial Reporting. Unless US have something to hide, otherwise IFRS will certainly
open up the economy and boost Foreign Direct Investments (FDI) and lift the economy.
(13) IFRS-USGAAP LONGTERM RELATIONSHIP:
There has been a long-term unholy marriage between these two standards, the IASB and FASB
have been working round the clock to maintain compatibility and convergence of these two
standards as we saw in the Norwalk Agreement (2002).Aside that, these two standards are
based on the Anglo-Saxon Common Law tradition. For me, I think it wouldn t be much a
paradigm shift if IFRS is adopted, because IFRS has been around in the US for at least 12-15 years
now, I think it s time to grant IFRS citizenship in the US, yes, IFRS should be adopted in the US.
(14) US GAAP IS PRICIPLE BASED IN COURTS:
Rules are made for Men. Men are not made for rules. The World understands the plight of some
Americans who are hell-bent on keeping the US GAAP. We know about Enron, World.com, K-
Mart to mention but a few, but the truth remains that it is not by the powers of the US GAAP
that fraud and creative accounting can be eliminated. The noise about the superiority of the rule
based US GAAP can be reduced if Americans can remember the 1969 Supreme court ruling of a
Criminal case, US v Simon, where the court adopted a principled based view of accounting in
deciding the case.
(15)US GAAP EXPENSES DEVELOPMENT COST:

7. Sometimes the laws and rules human beings make and subject ourselves to come back to haunt
us, they deter development. Firms in Manufacturing Industry, Oil and gas, Automobiles,
Telecommunications, Info-tech, etc spend billions of dollars in Research and Development of
new products, oil wells, technology and even when they succeed in developing the product,
finding oil, or anything they produce, you expect them to expense the cost of development. They
can expense research cost but expensing development cost when economic benefits will flow
into the entity and the entity have the resources to develop and use or sell the products
commercially is really a burden most firms can t bear. It means that the billions spent on
development won t be capitalized. It won t be captured as an asset on the financial statements
of the company. The jobs the machines bought for development of the new product did is
assumed to be worthless. This simply kills the drive for firms to go into Research and
Development. This reduces the Innovative appetite of US based firms using US GAAP.
(16)IFRS WILL PROMOTE UNIFORMITY AND TRANSPARENCY IN THE GLOBAL REPORTING:
Due to the political position occupied by the United States of America in the globe, it
indecision and delays in the adoption of IFRS is a thorn on the flesh of Global accounting
Uniformity and transparency. With the US adopting IFRS, it will increase the general level of
Uniformity and transparency of global statements. Even if there are issues of creative
accounting, window dressing or unjust claims from companies due to uniqueness of its
operations. IASB and other regulatory authorities can easily compare like to like with respect
to how other companies of the same industry, size or line of business other places around
the World treat the same issue in their financial statement and it will help to mitigate claims
that are against the spirit of the rules.
(17) IFRS HAS TECHNICAL COMPETITIVE ADVANTAGE OVER US GAAP:
IFRS critics in the US strongly believe that US GAAP is technically sound than IFRS. We cannot
totally write-off their claims, but this technicality is comparative. This assertion is a half-truth.

8. Let s turn the other side of the coin, the US GAAP should be more technically sound beyond
what the eyes can see when compared to IFRS because it covers only American economy, if
we look at it critically the IFRS can comfortable fit in to the job done by USGAAP and achieve
equivalent results but the US GAAP CANNOT do the job of IFRS. In fact it is impracticable,
then, why the technicality comparison stunts?
Let s dig deeper, US GAAP s major advantage is that it gives clear guidance on revenue
recognition, common control transactions, rate regulations, extractive industries and
Insurance more than the IFRS, but according to Scot Taub in his article Busting some Myths
about IFRS and US GAAP US GAAP is largely silent on fixed asset capitalization and
depreciation while IFRS provides guidance on these. IFRS covers general asset impairments
while USGAAP have specific models for some assets and nothing for others. IFRS covers
commission, concessions, compensation arrangements and government grants more
completely than USGAAP. With respect to options, IFRS allows optional re-measurement of
long term assets and investment property while US GAAP does not.
IFRS is working hard to strengthen those areas, so what is the rational for IFRS resistance?
(18) IFRS IS MORE DYNAMIC AND MORE RESPONSIVE TO CHANGES IN ACCOUNTING
PROFESSION:
Till today, US GAAP still reports Properties, Plants and Equipment (PPE s) using historical
cost, I would not know what that is meant to achieve, but common sense accounting will tell
us that the value of PPE s can change, it can move upwards in the case of Properties
especially land or it can depreciate in value in the case of Manufacturing plants and
equipments, then why carry it in the books at historical cost even when the value has gone
up or down? IFRS revalues PPE and Intangible assets to an amount which is equal to fair
market value less accumulated depreciation and amortization (Deliotte 2008).
(19) IFRS HAS A PROGRESSIVE ORIENTATION:
It is always easy to be a football fan, expect your team to score all the goals and win the
game. The story changes when you are handed a football boot, a jersey with your name
crested on it, to go and help the team win the match. The heavy difference between talking

9. and doing becomes very clear. So, is it in the game of Management, let s face the facts,
uneasy lies the head that wears the crown, even as an Internal Auditor I recognize that fact.
IFRS capitalizes development cost as stated in point 15,this will strengthen the Statement of
Financial Position(Balance Sheet) thereby making the efforts put in by the Management in
Innovation very visible to Investors, those millions are too big to be hidden, if we must
progress.
IFRS revalues upwards the value of an Intangible asset in an active market but not above cost
to take care of the dynamism in the market and this boost the Statement of Financial
Position (Balance Sheet) but USGAAP can only write down the value of an Intangible asset by
implication, the Americans don t see the value of any Intangible asset rising any day
unmindful of the conditions. This is a negative accounting orientation which should be
avoided in order to move any economy forward.

10. (20) IFRS ADOPTION WILL BOOST BUSINESS IN AMERICA:
There are many firms in America owned by investors from other countries of the World.
Some of these foreign companies in America are reporting with IFRS, an option given to
them by SEC. Now most of them cannot engage in economies of scale, expansion of their
businesses which is usually achieved by Joint ventures, Partnerships, Mergers and Acquisition
because of the rigidities inherent in fine-tuning or reconciling IFRS with USGAAP, that is if the
other businesses they want to merge with is using US GAAP.
This Reporting heterogeneity once removed will trigger big business combinations, huge
cash inflow into the American economy and push the American Economy beyond its
competitors in the global economy.
(21) IFRS ADOPTION WILL GET A JOB FOR TRADITTIONAL ACCOUNTANTS:
So many Accountants in the US who has preferred to take the IFRS-USGAAP debate with a
tint of extremism will devote their time to more meaningful ventures. That critically
destructive energy that pumps in the heart of Paul Miller and Paul Bahnson for IFRS will have
to be channeled to a income yielding venture. Shyam Sunder, Dave Albrecht will have to rest
their case and follow the current trends in Accounting.
IFRS adoption will give Fitch reasons to leave skepticism and focus on their job. Finally it will
be a win-win situation for all, America and the World.
Egege Justice

11. Is an Internal Auditor, based in Lekki, Lagos Nigeria.