Book Reviews 57

BELVERD E. NEEDLES, JR. and MARIAN POWERS, International Financial Report-

ing Standards 共Mason, OH: South-Western, Cengage Learning, 2010, v, 53 pp, ISBN-
13:978-0-538-74486-7, ISBN-10:0-538-74486-3兲. Information available at: http://
www.cengage.com/cengage/instructor.do?codeid⫽26DE&courseid⫽AC15&product_isbn⫽9780538744867&disciplinenumber⫽400.

The 2010 edition of International Financial Reporting Standards 共IFRS兲 by B. E. Needles, Jr., and
Marian Powers provides a good conceptual introduction for accounting majors. This publication is designed
as a textbook, or as a supplement for an accounting text.
In the coming decade, there is a high probability that IFRS will displace U.S. GAAP as the one truly
uniform set of accounting standards globally, and therefore it is important that accountancy majors are
exposed to it early in their college education. If there is truth to the expression that “accounting is the
language of business,” then IFRS is going to be the lingua franca—the de facto language of a specialized
field—in which accountants need to become conversant. For U.S. accountancy majors, many of whom will
become CPAs in the future, the urgency to master IFRS accounting principles and interpretations for the
purposes of financial reporting and auditing is rather acute, because many countries such as Canada, Chile,
India, Japan, and South Korea are adopting IFRS in 2011, and China adopted IFRS in 2007.
In this review of the book, I will first highlight the many desirable features of the Needles and Powers
presentation and approach. Next, I will provide a critique, including suggestions for the next edition 共after all,
the book is only about 50 pages, and can be updated easily兲.
As noted, the book is short, and while providing a condensed overview of IFRS, it nevertheless is
written in a lucid manner and presented in a logical fashion. Beyond the introduction, the book has four parts:
共1兲 Background of IFRS, 共2兲 The Structure of IFRS, 共3兲 Key Differences between IFRS and U.S. GAAP, and
共4兲 The Current Status and Future of IFRS. Four appendices provide useful supplemental information,
including one directing students to websites containing helpful IFRS resources. Most topical content takes up
only a page or two, but the authors have done a wonderful job of capturing all the key themes, sufficient to
provide a solid conceptual foundation. The text currently does have review questions at the end of each
chapter, and a few involve number calculations and journal entries. Clearly, students will need to actually
work out a larger number of intermediate and advanced accounting problems using IFRS in order to absorb
the implications of applying IFRS to practical and realistic financial reporting scenarios.
The major concern I have with the book is the rapid manner in which new IFRS resources are becoming
available, e.g., IFRS for Private Entities 共only mentioned as a project undertaken in the book, and now
officially issued as IFRS for Small and Medium-Sized Entities兲. Similarly, it now appears that SEC Chair
Mary Schapiro is even less enthused about mandating the migration from U.S. GAAP to IFRS than previ-
ously suspected—so, it may take the U.S. even longer to embrace IFRS than the “IFRS roadmap” laid out by
former SEC Chairman Christopher Cox. The politics and lobbying for and against IFRS adoption in the U.S.
need further analysis and coverage 共e.g., the IFRS prohibition of LIFO inventory accounting is a major
sticking point from a tax perspective for U.S. companies兲. So, a second edition of the book should be planned
right away, with the idea of providing timely web-based updates for those using the book.
A couple of real-world case studies to illustrate the U.S. GAAP versus IFRS differences would have
been most helpful. Whenever principles-oriented accounting standards are contemplated, the ability to make
judgments and draw carefully reasoned inferences becomes indispensable. Accordingly, IFRS adoption must
necessarily be accompanied by a course in the psychology of judgment and decision-making: in how to think
critically and make sound professional judgments. Such case studies could also underscore why the transition
from a “rules-oriented” Financial Accounting Standards Board 共FASB兲 regime of U.S. GAAP to a
“principles-oriented” International Accounting Standards Board 共IASB兲 regime of IFRS could prove complex
and challenging; particularly so in a litigious environment such as the U.S., where I have been fond of saying
that “the best principle would be to have rules!”
Despite these suggestions for improvement, I am persuaded that students and accounting faculty would
be served well by utilizing the Needles and Powers 2010 edition of International Financial Reporting
Standards. The book is a terrific way to introduce accountancy students to this major development in the
world of accounting standard-setting that has significant ramifications for their professional careers.
Sridhar Ramamoorti
Principal, Infogix Advisory Services, Infogix, Inc.
Former Corporate Governance Partner, Grant Thornton LLP
USA

Journal of International Accounting Research Volume 9, No. 1, 2010

American Accounting Association
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