When accounting goes unaccounted for
“Russian companies have a range of resource and processing assets abroad and that’s why we should assimilate the international standards of accounting as early as possible.”
~ The Russian Prime Minister won’t be waiting until 2011 to make up his mind.
“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]
All the SEC foot-dragging on IFRS may end up benefiting adopters, if only by buying them a little extra time to get things in order and figure out how on Earth to converge the encyclopedias worth of GAAP rules with IFRS’ pamphlet of principles. At a discussion on global standards hosted by the Pace University School of Business. WebCPA’s Debits and Credits shares some excellent talking points, like this winner from IBM director of IFRS policy and implementation Aaron Anderson:
“We know we have time between now and when the SEC mandates it. We can do a brisk walk instead of a sprint.”
Speaking of the SEC, Chief Accountant James Kroeker is offended by the insinuation that IFRS is more principled-based than our precious GAAP, noting in his speech that “U.S. GAAP is founded upon principles, that’s what the P is supposed to stand for.” GAAR just doesn’t have the same ring to it and it’s a tad too late to be debating semantics if you ask me.
The SEC is understandably cautious, especially having to contend with criticisms in the media over regulatory mishaps that allowed for the unchecked misdeeds of Bernie Madoff, Allen Stanford, and of course Goldman Sachs (oops). Still, full-on adoption of IFRS implies a complete departure from GAAP and it doesn’t look like Kroeker is comfortable with that idea, even if companies looking to divert the estimated $32 million cost to convert to IFRS totally are.
IFRS Delay Helps Some Companies [WebCPA]
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?