IFRS: U.S. deliberates, world marches forward
Remember that mad rush to move toward IFRS here in the United States? Ever since President Obama moved into the Oval Office and Mary Schapiro took the reins at the SEC, it has slowed to a crawl. Folks are using words like "thorough" and "thoughtful" in describing the U.S.'s IFRS deliberations, and that's not such a bad thing. If all our leaders were thorough and thoughtful, we might not be facing a lot of the problems we're facing now.
While we continue to deliberate the merits of IFRS, though, the rest of the world marches on.
The International Accounting Standards Board has published IFRS for Small and Medium-Sized Entities (SMEs), a "self-contained standard tailored for the needs and capabilities of smaller businesses." The standard is not part of the full international standards and therefore is "available for any jurisdiction to adopt whether or not it has adopted the full IFRS," the IASB explains.
Edith Orenstein at Financial Executives International has posted a fantastic summary of the new standard. In it, she explains the IASB's definition of "SME" as follows:
"I would describe it as a two-tier test," Orenstein writes. "First, the entity can have no publicly traded debt or stock, and second, the entity cannot be deemed as having 'public accountability' wherein it it 'holds assets in a fiduciary capacity for a broad group of outsiders ... which is typically the case for banks, credit unions, insurance companies, securities brokers / dealers, mutual funds and investment banks.'"
Of course, many believe it's only a matter of time before the U.S. catches up to the rest of the world, and at least one learned soul -- instructor and Ohio Dominican University faculty member Peter Margaritis -- says IFRS in the United States is "inevitable."
"I don't picture the Unites States sticking with U.S. GAAP while the rest of the world runs on IFRS," Margaritis, a CPA and chair-elect of the Ohio Society of CPAs' executive board, said during an interview at the 2009 Maryland Business and Accounting Expo. "What's that going to do to our capital market structure? We wouldn't be the leader in the financial world. I think we are in a position where we have to move forward with (IFRS). Yes, we should put some serious thought into how this is going to transition, but we shouldn't stop the process."
I have to agree, but I'm curious what the rest of the CPA world thinks. Is IFRS "inevitable" in the U.S., as Margaritis believes? Let us know what you think, then check out these other IFRS resources:
- IFRS: All hands on deck
- Executives on IFRS: Give us a plan and let us go
- Are You Ready for IFRS? Moving Beyond the Basics (an MACPA program on Sept. 23-24)
- The Impact of IFRS and Other Global Standards on Private Entities (an MACPA program on Dec. 17)
- International versus U.S. Accounting: What in the World is the Difference? (an MACPA program on Dec. 18)