The Group of 20 wants to see U.S. accounting standards merge with international standards, and so do finance executives at U.S. corporations. At the major nations' meeting this month in Pittsburgh, the G20 requested that U.S. and international accounting regulators work harder to achieve a convergence of U.S. GAAP and international financing reporting standards (IFRS) by mid-2011. The G20 statement, along with some friendly comments made recently by Securities and Exchange Commission (SEC) officials, suggest the move toward a single set of global accounting standards is regaining steam.
Meanwhile, a recent survey of U.S. finance executives found that while 70% want the SEC to approve its proposed road map for the U.S. adoption of IFRS, most favor some adjustment. More than 50% of the 150 executives surveyed by Deloitte say the SEC should consider delaying the plan's deadline for a year. The road map calls for large companies to start using IFRS in fiscal years ending after Dec. 15, 2014, but it gives the SEC until 2011 to make a final decision. Companies worry that an SEC decision in 2011 wouldn't give them enough time to prepare for a 2014 start.
The executives were divided on the best way to make the change in accounting regulations. Thirty-nine percent say the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) should extend their efforts to converge U.S. generally accepted accounting standards with IFRS over the next five to 10 years. Another 39% think FASB and IASB should make as much progress on convergence as they can by 2011 and then switch to converting U.S. companies to IFRS, and 17% say standards setters should give up on convergence now and focus on conversion efforts.
Some U.S. critics have argued that the IASB lacks independence, a charge that relates to the fact that it depends on private-sector donations for its funding. At a recent briefing for financial reporters in New York, Sir David Tweedie, chair of the IASB, said the independence issue would be resolved if the U.S. and Japan adopted IFRS and provided a counterbalance to pressures on the board from European users.
Once the SEC announces that the U.S. will adopt, “the independence issue is substantially solved,” Tweedie said. “At the moment, we are vulnerable. To get truly independent global standards, we need the SEC.”
On the other hand, he warned that if the U.S. failed to adopt IFRS, it could lessen U.S. influence on the standards. Such a move would probably produce calls to eject the six U.S. members of the 22-member International Accounting Standards Committee, which oversees the IASB, Tweedie said. “If you went out and later came back in, you won't have had any influence on decisions taken in the meantime.”
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
