Over a hundred countries around the world use an agreed set of “international financial reporting standards” (IFRS), but the US is not among them. It uses its own “generally accepted accounting principles” (GAAP), which is not generally accepted.
American exceptionalism is nothing new. Temperature in Celsius? Distance in meters? Red for leftists and blue for conservatives? May 1st as the labor holiday? Football as the name of the sport where you kick a ball with your feet? No thanks, the rest of the world is simply out of step.
But business is global, and global activity requires common understanding. It seems bizarre that a country can take the lead in so many entrepreneurial industries – Hollywood, fast food, computing, extreme sports, space vehicles – while seeing no need to maximize the spread of those enterprises through common financial terminology and structures.
But perhaps it is symptomatic of the entrepreneur’s mind that the dream is the thing – once the new idea is properly realized, the rest of the world will come around to the correct way of thinking. And sometimes that happens!
In the meantime, the multi-language Contextuary on our website is our small contribution to the development of a common understanding of basic business terms and concepts.