Tag: IASB

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IASB, FASB Trying to Get Everyone in the Ballpark on Revenue Recognition

The aim is for companies across the world to recognise revenue consistently as part of wider efforts to forge a single set of global acccounting rules to help investors. The core principle that a company must recognise income from contracts when it transfers the goods or services to the customer remains unchanged. But the proposal has been simplified in parts and contains more guidance after several sectors like construction and telecoms raised concerns. “Our proposals will give analysts and investors the confidence that revenue is being presented on a consistent basis, across industries and continents,” IASB Chairman Hans Hoogervorst said in a statement. “We plan to conduct additional outreach with interested parties during the comment period to help people understand the proposed guidance and to listen to any remaining concerns,” said FASB Chairman Leslie Seidman. [Reuters]

Retired IASB Member Calls IFRS Compliance “A Must” for G20 Nations

Now, let’s keep in mind he said this at an “IFRS and Emerging Market” meeting in Lagos, and meant it in regards to African companies.


Retired IASB board member Bob Garnett said for any country seeking membership of G20, becoming IFRS compliant is a must. He also said African companies will need to work together in regional groups to have more weight as they will not gain necessary influence on their own because they do not have the IFRS track record yet.

The pre-workshop meeting at which Garnett made these comments was organized by Ernst and Young (“a leading voice in IFRS converstion,” according to Nigerian publication The Nation).

Remember it was only days ago that the IASB’s fearless fish-loving leader Hans Hoogervorst was in Boston assuring U.S. regulators they’d have a say in IFRS rules if they’d just hurry up and adopt already. No mention was made about kicking us out of G20 if we don’t embrace IFRS fully and soon.

Anyone else smelling the distinct aroma of desperation?

Also last week at the Boston conference, AICPA CEO Barry Melancon said the SEC should allow U.S. companies to use IFRS if they want “to level the playing field with their international competitors.”

IFRS cheerleading sessions are taking place all around the world at this point, and it’s only a matter of time before the SEC will finally be forced to commit to a plan and adopt. Or else?

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!

Hans Hoogervorst Doesn’t Want the U.S. to Worry Its Pretty Little Head About Losing Influence Over Accounting Rulemaking

Hoogervorst said U.S. sovereignty would be protected by the SEC having a final say before any IASB rule is introduced. “Such endorsement mechanisms provide an important ‘circuit breaker’ if the IASB produced a standard with fundamental problems for the United States,” Hoogervorst told an accounting conference. The SEC would remain in full control of enforcement. “So there is absolutely no danger of importing different enforcement standards from abroad into the United States,” the former Dutch finance minister added. [Reuters]

Who Among Us Considers the IASB a “Success Story”?

Count IASB Vice Chairman Ian Mackintosh as one.

Ian Mackintosh called the IASB a success story, saying global standards are now accepted in more than 120 countries and high-profile non-signer the US will make a decision later this year.

A high-profile non-signer who increasingly sounds pessimistic about the whole exercise. Oh! India and Japan aren’t sold either. Sounds like a winner, doesn’t it?

Investors: IFRS unfit for purpose [Accountancy Age]

Surprising Absolutely No One, FASB Pushing Back Their Convergence Timeline

Floored. Just floored.

Financial Accounting Standards Board chair Leslie Seidman said that many of the priority projects slated for convergence with the International Accounting Standards Board probably will not be settled until next year at the earliest.

Les will have all you haters know that this adjusted timeline has been well received by those that are taking this shit seriously:

This is a real process with real outreach and real consideration of the issues that have been raised. And the fact of the matter is that it takes time to work through these issues. The changes which we have made to the timetable, which we have made jointly with the IASB, have been very well received among the constituents who take this process seriously. They are very supportive of our strong commitment to making sure that we end up with improved standards here that are going to stand the test of time.

So if you were expecting Fisher Price accounting rules, you can forget it. These beautiful babes will be used to line up the debits and credits when Spacely Sprockets finally breaks ground.

FASB’s Convergence Timeline Moves to Next Year [AT via Jim Peterson]

IASB Chairman: You Can’t Stop IFRS; You Can’t Even Hope to Contain It

“It is my strong conviction that the momentum behind IFRS is so strong right now it can only be delayed but it cannot be stopped any more,” IASB’s chairman Hans Hoogervorst said.

The United States has an “extremely important” decision to make this year on whether to replace its own Generally Accepted Accounting Principles (GAAP)standard with IASB rules, Hoogervorst told a webcast meeting of the IASB’s trustees in New York. By next year two thirds of the world’s top 20 economies (G20) will be allowing or requiring local listed companies to use the IFRS accounting rules. [Reuters, Earlier]

This EU Guy Really Doesn’t Like the IASB’s New Magical Fair Value Plan

In case you thought the fair value debate was limited to the U.S. circa 2008, think again. A rule you probably haven’t heard of (but will likely see a version of once government debt becomes as much of a pain in the ass here as it has been in Europe) called IFRS 9 (which replaces IAS 39) would allow banks to price some government debt on their books at cost, instead of current awful prices.

Apparently the European Union doesn’t like this idea. EU Internal Market Commissioner Michel Barnier told a webcast meeting in New York this week “I do not believe this will be the first solution to the problems we face in Europe at the moment,” referring to IFRS 9‘s creative interpretation of “fair value.” Ironically, IFRS 9 accomplishes this feat by eliminating available for sale and held-to-maturity classifications for bonds, leaving only amortized cost and fair value.

IASB Chairman Hans Hoogervorst insists this plan is really only the suck less option, not some sort of magical accounting trick that will suddenly make Greece solvent and Irish banks healthy. “Under IFRS 9 impairments will still be painful but I am convinced it would be more timely done because the cliff effect is much less severe,” he said at a recent joint meeting of the IASB’s trustees and monitoring board of public officials, including Michel Barnier.

EU’s Barnier says won’t budge on accounting rule [Reuters]

Some Are Suggesting That the IASB Is Filled with a Bunch of Spineless Jellyfish

Representatives of large institutional investors told the Securities and Exchange Commission on Thursday that they had serious qualms about the London-based International Accounting Standards Board replacing the U.S. Financial Accounting Standards Board as the primary arbiter of accounting rules in this country.

Speaking at an SEC panel focusing on investor views of international financial reporting standards, the representatives roundly supported the goal of establishing a single set of high-quality global financial reporting standards in the United States in the form of IFRS. But they suggested that the IASB, the current promulgator of IFRS, lacks the backbone and outreach capability of FASB — qualities that would be needed for a global system to succeed. [CFO]

FASB, IASB Making Damn Sure They Don’t Mess Up Their Revenue Recognition Proposals

Because, god, wouldn’t that be awkward?

The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) agreed today to re-expose their revised proposals for a common revenue recognition standard. Re-exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in June 2010.

It was the unanimous view of the boards that while there was no formal due process requirement to re-expose the proposals it was appropriate to go beyond established due process given the importance of the revenue number to all companies and the need to take all possible steps to avoid unintended consequences.

Sir David Tweedie admits that, “It is important that we get this right, first time,” and “the boards and staff have undertaken an unprecedented level of outreach to get us to this point, and why we are keen to treble-check that our conclusions are robust and can be implemented with minimal disruption.”

Maybe I’m reading too much into that statement but it sounds as though the Boards may be trying to stave off more nasty letters.

[via FAF/IFRS Foundation]

IASB Would Prefer If India Were to Play Ball, Adopt IFRS

The International Accounting Standards Board is none-too-pleased that India has retreated from plans to fully adopt International Financial Reporting Standards this year and is a making a public push to get the country back on track. A failure to persuade India on the issue would raise serious questions about how successful IASB can be in convincing other major economies, including the U.S., China and Japan, to make a full switch. “To put it in one sentence, we strongly encourage adoption as against convergence,” IASB member Prabhakar Kalavacherla said at a conference in Mumbai last week, according to a copy of his speech, where he urged India to take a bigger role in international standard setting to address its concerns. [CFO Journal]

We’ve More or Less Got Converged Fair Value Accounting Standards

As CFO notes, “[T]he largest differences may lie in the differences between British and American English,” but these are the ones you’ve been waiting for.

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today issued new guidance on fair value measurement and disclosure requirements for International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).

The guidance, set out in IFRS 13 Fair Value Measurement and an update to Topic 820 in the FASB’s Accounting Standards Codification® (formerly referred to as SFAS 157), completes a major project of the boards’ joint work to improve IFRSs and US GAAP and to bring about their convergence.

The harmonisation of fair value measurement and disclosure requirements internationally also forms an important element of the boards’ response to the global financial crisis.

Of course what’s most important is that wily Scotsman and knight of the double-entry roundtable Sir David Tweedie will be able to call it a career knowing that he saw this thing through. He sounds pretty pleased with the effort saying, “The finalisation of this project marks the completion of a major convergence project and is a fundamentally important element of our joint response to the global financial crisis. The result is clearer and more consistent guidance on measuring fair value, where its use is already required.” Hans, you can take it from here.