With the recent decision by the SEC to allow foreign corporations to file their financial statements in accordance with IFRS (no reconciliation to GAAP required), does GAAP (and FASB) have much of a future? FASB, recognized by the SEC as a standard setting body, has traditionally served setting standards for public companies who report to the SEC.
However, with the recent decision to no longer require foreign companies to reconcile with GAAP, the SEC has taken the first step towards requiring no publicly traded company to report based on GAAP if they use IFRS. FASB and the IASB are still working on their convergence project to create a single international standard for accounting, but with this move the SEC has tilted the balance of power in favor of the IASB.
If FASB and IASB have a serious disagreement, I doubt IASB will have much incentive to concede (or even compromise). FASB may remain in play for privately held companies, or public companies that are deeply entrenched in GAAP and have no international components, but the a large number of US based public companies will probably take the option to report on IFRS when it is given to them. This proposition is already being floated around the SEC and will probably be approved shortly (if IFRS is good enough for one set of publicly held companies, it is good enough for another set of publicly held companies).
Accountants and auditors for publicly held companies may have only one set of standards to be intimately familiar with in the near future as IFRS is positioned to take the place of the American standard of accounting embodied in GAAP. Apparently good guiding principles trump stringent, sticky, loophole-filled rules.