Examining the initial adoption of IFRS accounting policies is important since over 120 countries now require or permit IFRS financial reporting for listed or private entities. In particular, many U.S. companies must adopt IFRS because their foreign parents or investors report under IFRS, and the Securities and Exchange Commission allows foreign companies in the U.S. to use IFRS for SEC reporting purposes. The purpose of this case is to enhance your understanding of the objective of general-purpose financial reporting, the concept of comparability in theIASBs Conceptual Framework for Financial Reporting that flows from that objective, and relevant guidance on the initial adoption of IFRS accounting policies.

Imagine that you are the head of Global Financial Reporting and your firms Chief Financial Officer has asked you to respond to the questions listed below. The firm is now formulating strategic plans for its divisions, which requires a solid understanding of the impacts of U.S. GAAP to IFRS conversion. Because most of your competitors use either IFRS or U.S. GAAP, a strong understanding of key differences between IFRS and U.S. GAAP is crucial in key business-planning activities. In responding to the questions, use annual reports from 2003 - 2007, before and after the adoption of IFRS in the European Union. Your responses to the questions should address the requirements in detail, providing citations of sources used. Submit in memo form.

Question 1 Identify which accounting standards were used for financial reporting by your company in each year 2003 2007. In the year that the company transitioned to IFRS, what information did it disclose about the transition? What are three obstacles to financial statement comparability across accounting standards? Discuss why these obstacles could be problematic for a large global investor such as Fidelity Investments.