What are the implications of differences between reporting by IFRS and Essay

What are the implications of differences between reporting by IFRS and US GAAP reporting by UK Investment banks and US GAAP reporting by US investment banks - Essay Example The report includes an analysis of financial statements of Merrill Lynch and Investec which are in the investment banking industry operating on different sides of the hemisphere. The history of the European investment banking industry dates back to the 1700’s when London was the major city for investment banking activity. The United States after it was founded in the late part of the 18th century attracted a lot of European entrepreneurs and investors which later enjoyed a great surplus of a diversified workforce, which contributed to the creation of the richest nation in the world. The United States had taken the lead in the 20th century to build the best and most sophisticated financial system (SEC) based on Generally Accepted Accounting Principles (GAAP). This gained early experience in the emerging industry and obtained the greatest market share of equity selling volume in the world. European nations solidified the investment banking industry at the turn of the 21st century. This study analyses the differences between GAAP and IFRS in investment banking affairs in order to compare and contrast the systems. Moreover, the impact of differing policies on decision making is further explored. The research is broken down into seven parts: The problem statement, research objectives, literature review, and importance of the study, research design/methodology, schedule and conclusion. The current state of the industry as well as the future trends is discussed throughout the paper. The investment banking practices in Europe and the United States do not follow the same procedures and regulations because the GAAP and IFRS frameworks utilised in each continental region differ. This affects company and capital investor’s worldwide. For example if a USA based company wishes to sell its shares in a European stock exchange such as the