Accounting & Auditing | Legislative / Regulatory

Potholes on the road to convergence?

Global The sprint toward global financial accounting standards has slowed considerably in the United States, leaving the rest of the IFRS world wondering when the U.S. will catch up.

But Americans aren't the only ones making waves.

According to a report in the Financial Times, Michel Barnier, internal market commissioner for the European Union, is hinting that funding for the International Accounting Standards Board could be jeopardized if the IASB doesn't bow to a plan to revamp its governance.

“We want to see more issuers –- more banks and more companies –- and more prudential regulators represented on the governing board (of the IASB),” he said. That could "derail the convergence process" in the United States and Asia, writes the Financial Times' Rachel Sanderson.

That process has been on shakier ground lately for a number of reasons, and in "IFRS: Dead in the USA?" CA Magazine's Lawrence Richter Quinn examines a number of them. Among them is this nugget from the MACPA's own Tom Hood:

“Two years ago, as the SEC was coming out with its road map, there was no question that companies were somewhat more enthusiastic about the move toward IFRS. At that point, there was no recession, no financial crisis; fewer things were on the CFO’s plate. Now among large, publicly traded companies, there is more skepticism, more realism about what they may be facing. In the past 24 months there has been layering on of more and more things for CFOs and their finance teams to contend with: the mandate to move toward XBRL itself has been at least as big a project as IFRS promises to be. Add to that the uncertainty created by so many public policies in play, including health care, employee benefits, financial regulatory reform, cap and trade and taxation.”

What do you think? Is IFRS in real trouble? If not, what's next? If so, what are the alternatives?

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Bill Sheridan