While the use of IFRS in the US by public companies will not be required in the foreseeable future, IFRS is relevant to many US businesses. Companies will be affected by IFRS at different times and to a different degree, depending on factors such as size, industry, geographic makeup, M&A activity, and global expansion plans. The following discussion expands on these impacts.

1.2.1 Mergers and acquisitions and capital-raising

Global economic slowdown caused by the Covid-19 pandemic led to a decline in the volume of global M&A transactions in 2020. However, we expect that as world economies recover, M&A activity will recover. For companies that look outside their borders for potential buyers, targets, and capital, knowledge and understanding of IFRS become increasingly important. Significant differences in both bottom-line impact and disclosure requirements exist between IFRS and US GAAP. Understanding these differences and their impact on key deal metrics, as well as on both short- and long-term financial reporting requirements, will lead to a more informed decision-making process and help minimize late surprises that could significantly impact deal value or timing.

1.2.2 Non-US stakeholders

Many US companies have non-US stakeholders. These stakeholders may require IFRS financial information, audited IFRS financial statements, and budgets and management information prepared under IFRS.

1.2.3 Non-US subsidiaries

Many countries require or permit IFRS for statutory financial reporting purposes, while other countries have incorporated IFRS into their local accounting framework used for statutory reporting. As a result, multinational companies should, at a minimum, monitor the IFRS activity of their non-US subsidiaries. Complex transactions, new IFRS standards, and changes in accounting policies may have an impact on an organization beyond that of a specific subsidiary.
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