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Empirical test on the removal of reconciliation requirement from IFRS to US-GAAP

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  • Chunhui Liu
  • Grace O'Farrell

Abstract

On March 4, 2008, Release No. 33-8879 adopted by the Securities and Exchange Commission (SEC) went into effect and eliminated the need for US-listed foreign companies who prepare financial statements in accordance with IASB-IFRS (International Financial Reporting Standards as issued by the International Accounting Standards Board) to reconcile their financial statements to US-GAAP (US Generally Accepted Accounting Principles). Former studies based on data before 2005 revealed significant differences between IFRS reported measures and US-GAAP reported measures and found Release No. 33-8879 to have been premature. This study updates the literature on differences between IFRS and US-GAAP with recent data and studies convergence between IFRS and US-GAAP by evaluating IFRS vs. US-GAAP comparability in reported net income and net assets from 2004 to 2006. The evidence of convergence is identified.

Suggested Citation

  • Chunhui Liu & Grace O'Farrell, 2010. "Empirical test on the removal of reconciliation requirement from IFRS to US-GAAP," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 2(2), pages 123-133.
  • Handle: RePEc:ids:injmfa:v:2:y:2010:i:2:p:123-133
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