It is still hard to understand why it is taking so long for the final decision t

Question

It is still hard to understand why it is taking so long for the final decision to be made. It is interesting that so many other countries have adopted the standards and some of the countries as well advanced in their financial reporting methods. You may not be aware of it but the United States is one of the few major countries that have not adopted Global Warming standards as well. I believe cost is playing an important role in both decisions. Companies in the U.S. are reluctant to do anything that may impact its bottom line profits. In the short-term it is likely the start-up costs of the new system will be substantial and will have an impact on net profits. However, I believe the long-term benefits of have an international set of standards far outweigh the short-term losses that U.S. firms will incur.

What are your thoughts on the U.S. position in both areas of international accounting standards and international global warming standards?

Explanation / Answer

Human activity--such as burning fossil fuels--causesmore greenhouse gases to build up in the atmosphere. As the atmosphere "thickens" with more greenhouse gases, more heat is held in. Fossil fuels such as oil, coal and natural gas are high in carbon and, when burned, produce major amounts of carbon dioxide or CO2.

International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. They are progressively replacing the many different national accounting standards. They are the rules to be followed by accountants to maintain books of accounts which are comparable, understandable, reliable and relevant as per the users internal or external.

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