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That's not a typo. As we are faced with new global accounting standards, we can't help but ask ourselves: is accounting going too global? Are these standards more than we need for our U.S. operations?


On May 18, 2008, the AICPA added International Accounting Standards to the acceptable forms of presentation for audited financial statements in the U.S. These standards are not a requirement for your financial statements, but they are an option.

Between 2011 and 2015, many U.S. companies will move to international accounting standards. The Financial Accounting Standards Board (or FASB, the U.S. accounting rule-making body) has already started working on joint projects with the international rule making body, the International Accounting Standards Board (IASB). Changes in the structure of FASB, like a reduction in the number of members from seven to five, appear to be the start of the future merger of FASB and IASB.


For many small businesses in the U.S., following these standards for financial statements will be too global. The option of presenting financial statements on an "Other Comprehensive Basis of Accounting" (OCBA) will be selected. Tax basis or cash basis presentations are already growing in popularity in the U.S., and the move to international standards will likely move more businesses to these accounting presentations.


If you currently use generally accepted accounting standards for your financial statements, you may want to discuss other options with your Rea & Associates, Inc. professional.


-By Jeffrey H. Tucker, CPA (New Philadelphia office)


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