Global Reporting Standards are gaining popularity among investors and finance executives, according to a new report by ACCA. Around 170 senior executives and investors were questioned. More than 40% said international financial reporting standards improve access to capital, while around 25% believe the global standards have lowered capital costs. ACCA chief executive Helen Brand said: “Growing support amongst CFOs and investors for [IFRS] must be considered carefully” by US regulator the SEC as it debates converging US GAAP with international standards. “We believe a positive answer from the SEC would give a tremendous boost to the cause of financial reporting and more importantly the world economy.” [Accountancy Age, Earlier]
Related Posts
Did You Guys Hear the IASB Wants the U.S. to Adopt IFRS?
While the world is filled with torment, class warfare, famine, racism, war and uprising, those darn kids at the IASB are still concerned with one thing and one thing only. That one thing, obviously, is the U.S. adoption of IFRS.
Anyone else get the feeling Hans and Co. are getting a tad impatient with our heel dragging?
Piggybacking off the post Caleb was too lazy to write himself yesterday, we hear IASB chairman Hans Hoogervorst said in a Boston speech yesterday that adopting IFRS would offer U.S. public companies “the same financial reporting language for both internal management reporting and external financial reporting on a worldwide consolidated basis.” Where this is a benefit for us is entirely unclear to me, but that’s why I’m not chairman of the IASB.
Ol’ Hansy also promised that the U.S. would still play a pivotal role in shaping global accounting rules if we go ahead and trust them and adopt outright now. It is unclear whether that was a threat or not, as it is also unclear if he really thinks we’re that dumb.
This is the IASB chair’s first American speech, and in it he also said that the SEC can serve as a sort of emergency switch should the IASB decide to implement a rule that just won’t work in U.S. markets. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” he told the conference.
“So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” he said. You hear that, kids? Absolutely no danger. Well crap, why haven’t we adopted these fabulous standards already then? It can’t possibly fail, the IASB told us it’s all good!
IASB Chairman: Convergence Is So Over
“The simple truth is that when you have two independent, highly competent boards, sometimes they will agree with each other, and other times they will not,” he said. “It’s not that one is right and the other wrong; they just reach different conclusions. The same would be true if I were to split my board in two and ask them to consider 10 projects. I doubt each smaller board would reach identical conclusions on all 10 projects, so convergence would require compromises to be made. Convergence therefore does not always result in the highest quality outcome. It has served its purpose, but now it is time to move on. [AT]
Sir David Tweedie’s Patience Is Wearing Thin
He may be on his way out the door but still IASB chair David “that’s Sir David to you” Tweedie is still sick of all our heel-dragging on IFRS in the U.S. He hasn’t gone so far as to say we’ll be left in the capital market dust if we don’t adopt tomorrow but he’s clearly fed up with our procrastination.
If they put off a commitment to international financial reporting standards beyond 2011, U.S. accounting rulemakers and standard-setters would impose “unnecessary costs and risks on U.S. companies,” Sir David Tweedie, chairman of the International Accounting Standards Board, said Wednesday at a U.S. Chamber of Commerce gathering on the future of financial reporting.
The major risks are competitive ones, said Tweedie. U.S.-based multinationals already must fill numerous sets of accounting books. Many must file their financials under U.S. generally accepted accounting principles even as they report on the activities of their overseas subsidiaries under IFRS or the standards crafted by individual nations, he pointed out. At the same time, their foreign competitors can use IFRS for all purposes, even for filing with the Securities and Exchange Commission, he added.
As is, the transition to IFRS is estimated to cost American companies $35 million per year (remember 3 years of restatements will be required). We’re not sure if he has access to different estimates that somehow make qualified IFRS monkey restatements more expensive in 2012 and beyond than they would be by the end of this year but it seems painfully clear that he means business.
I’m not sure if he missed the memo but we don’t seem as enthusiastic about convergence as we did when we delayed the release of a roadmap in 2008. Three years later, we don’t appear to be any more prepared for the transition than we were then and still have three (or make that four) more good years to drag our heels according to recent statements by the SEC.
How much clearer does Tweeds need it? We’re just not that into your standards.