THE IMPORTANCE OF CONVERGENCE BETWEEN US GAAP AND IFRS FOR PUBLICLY LISTED COMPANIES

The elements of financial statements should present economic or actual course of business events in an enterprise, which should ultimately result in their fair and objective presentation. In this way the financial statements achieve their primary objective – provision of information to various users about financial position, business performance, and changes in the financial position of the enterprise. “Business decision makers on financial markets around the world are interested in information from financial statements that fairly and realistically present business performance, and financial strength and position of the listed enterprise. The fact is that only such information contribute to the primary objective of financial statements in the decision making process” (Ramljak, Anić-Antić, 2009). However, the application of different accounting standards greatly reduces stated benefits which are provided by the information from financial statements. Although initially, in the 1950ies, this problem tried to be solved by the harmonization of accounting standards, at the end of the 1980ies that idea was replaced by the concept of convergence, or, on the creation of unified set of high-quality, international accounting standards.