INTERNATIONAL CONVERGENCE OF FINANCIAL REPORTING

Abstract

The purpose of this article is to study the state of global convergence of financial reporting standards at the present stage, as well as to consider the key points of the process of unification of International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles  (GAAP). To achieve this goal, the article considers the concepts of convergence, harmonization and standardization, presents an analysis of the intensity of use of these concepts, which are associated with the dynamic development of recent global accounting transformations and major trends in international convergence of financial reporting. The key stages of the process of unification of International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP) are considered. For decades, the European Union, the International Organization of Securities Commissions (IOSCO) and the Committee on International Accounting Standards have supported international efforts to harmonize US GAAP and IFRS. accounting and reporting standards used in different countries. We have determined that while both IFRS and GAAP aim to provide transparency, informational content and usability in financial statements, these standards use different approaches to achieve this. We indicated that at present IFRS is the dominant accounting and reporting system, in fact, only third world countries do not apply it. We have proven that in the process of achieving convergence, a single set of understandable and feasible international accounting standards must be developed, requiring high quality, transparent and comparable information in financial statements in order to ensure convergence of IFRS and GAAP. We analyzed the intensity of the use of the concepts of IFRS and GAAP, which are associated precisely with the convergence of these accounting systems using the Google Ngram Viewer (GNV) tool. We have proved that the Convergence of IFRS and GAAP also applies to Ukraine, since the convergence is bilateral, any change in IFRS will ultimately affect the Ukrainian accounting and reporting system.