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Late stage questions for IFRS . . . .

August 6th, 2008 Comments off

Only two days ago it was announced that the SEC had filled two vacant commissioner posts and those individuals would be making their debut at the IFRS Roundtable. While I noted that this was a subtle signal towards the IFRS initiatives, it didn’t take much to read into the accompanying statement that the SEC had a much larger list of issues to deal with before scheduling a definitive effort towards IFRS conversion. I’ve also commented in previous postings that as a participant in an early IFRS conversion, I would have never thought that these new standards would trump those that the U.S. has spent decades establishing and refining. It seems that in yesterday’s release that there may be some new considerations by the SEC towards IFRS and making the firm commitment to adopt.

As noted in the new commissioner press release, the SEC is currently working on reforms in naked short selling, municipal-securities rulemaking, SEC registrations, along with two dozen other financial reporting issues. These topics are currently on the plate for the SEC and we’re going to fully commit to an IFRS conversion? Not too mention, some of the general considerations as of late is that too accommodate such a conversion, there would be a three-year moratorium on new accounting standards or revisions. Hard to say what the next financial “crisis” will be, but three-years seems quite a window to say that there will be no new updates. During the Roundtable discussion, there were also six other key questions raised regarding an IFRS conversions.

•Do international standards produce the same quality of reporting as U.S. GAAP does?
•Would the application and enforcement of international standards in the United States be as rigorous as they are in the case of U.S. GAAP?
•Does IASB have an adequate and stable source of funding that’s not dependent on private donors?
•Does IASB have enough full-time, technically capable, and independent staff members?
•Does IASB pay the most attention to the views of customers of financial reports–that is, investors?
•Does IASB have a structure, process, and adequate governmental support to keep its standards work from “being overridden by political processes?”

This is really an interesting topic and one I’m keen to follow. It’s going to be interesting to see whether the U.S. essentially forgoes standards that have been developed over the decades and adopts a global set of standards, which might mean a softening of rules.
Read the entire article at: Global Standards: Jilted at the Altar?

Thanks for reading . . . .