An analysis of the implications of the IASC comparability project for IAS adopters in the US

A group of foreign issuers adopted IAS for reporting in the US capital market at about the time that the IASC Comparability Project commenced. This study examines the IAS-US GAAP adjustments for net income and equity reported in their SEC Form 20-F reconciliations with special emphasis on the degree of flexibility of the related IAS. We then consider the reporting implications of these IAS-US GAAP differences before and after the IASC Comparability Project. The results indicate that the adjustments are associated with flexibility in IAS and that the Project reduced the amount of flexibility in IAS provisions. This should prove of interest to standard setters at this time when a set of international accounting standards is being considered for global acceptability.