The SEC recently proposed a roadmap whereby public companies in the US who are regulated by the SEC would be required to move to IFRS. See the SEC press release relating to this here. But what does this mean for private companies in the US?
First off, I remember conversations with other CPAs five to seven years ago relating to the question "Would the US ever move to IFRS and would US GAAP go away." Most of them had the opinion that that would never happen; US GAAP would never go away. People would talk about the convergence of US GAAP and IFRS, that might occur. But then the realities of "converging" were considered and people moved to the opinion that the US should not converge, but should rather bite the bullet and move to IFRS. For example, one reason convergence would not work was trying to reconcile explanations of something in US GAAP and IFRS which used different wording would simply not work. One set of financial reporting standards needed to exist. People are also seeing the negative consequences of different "implementations" of IFRS in different countries. Bottom line is that if the world wants one set of financial reporting standards, there really needs to be one set of financial reporting standards; otherwise, the benefit of one set of standards (the entire point of IFRS) would never be realized.
Other countries have gone through the process of converting to IFRS and are ahead of the US. For example, Australia and New Zealand are in the process of converting. One of the interesting things they have discovered is that if listed (public) companies swith to IFRS, what will happen to accounting standards for private companies?
It is expensive to write high quality financial reporting standards. For example, New Zealand is a small country. They spend a lot of money to create high quality New Zealand accounting standards. These standards were used by both public/listed companies and private companies in New Zealand. The country decided to go to IFRS for listed companies, but then figured that if private companies also used IFRS, then they could shut down the board that created New Zealand accounting standards altogether (or dramatically cut back on what they did). Australia seems to be doing the same sort of thing as New Zealand.
The US is quite a bit bigger than New Zealand and Australia. But many of the same issues those countries and other countries have had to go through also apply to the US.
It is highly unlikely that the US will end up with two sets of accounting standards; one for public companies and another for private companies. Most people that I have talked to which track IFRS and are trying to figure all this out feel that all companies in the US will be moving to IFRS. That seems the logical route to me also. As to the time frame, well, that is another story.
But then again, I remember when the US converted to the metric system. That did not quite work out as was hoped.
Who knows what will eventually happen. This is certainly interesting times for accounting!