IASB Plans Network for IFRS. U.S. Seen Cautious. World is Cranky. Deadline: 2013.
The International Accounting Standards Board plans to establish a formal network to give standard-setting bodies a voice when their countries switch to International Financial Reporting Standards. There is conflict, however, over how the network will operate and whether it would dilute IFRS as a single set of reporting standards. Advocates of such a network say the U.S. will not commit to IFRS without it. Â In an article called “Long Push for Accounting Standards”Â sub-titled “The United States is Seen to Be Dragging its Feet in Choosing to Come on Board,” Â Star Publications (Malaysia)/Reuters reports:
SHAREHOLDERS and regulators have long wanted the â€śholy grailâ€ť of a single set of reporting standards as a bedrock for comparing performance and value of companies across the world but US reluctance means this goal is still a distant prospect.
US conditions for backing a common accounting language look likely to leave investors having to pick apart local rules and regulations as they scour global markets for havens in which to put their money.
The International Accounting Standards Board (IASB), whose guidelines are used in more than 100 countries mainly in Asia and Europe, and the US Financial Accounting Standards Board (FASB) have been locked in talks to align their rules for years.
The work has become bogged down in technical debates and pressure from auditors such as KPMG, PwC, Deloitte and Ernst & Young to take time to get it right, but policymakers are losing patience as investors are left waiting.
Finance ministers from the world’s top 20 economies (G20) gave the two rule-setters an ultimatum recently, saying they must finish alignment by mid-2013 â€śat the latestâ€ť, 30 months after the original G20 deadline.
â€śThe delay is pretty hard to fathom for outsiders like politicians and regulators,â€ť saidÂ Nigel Sleigh-Johnson, head of the financial reporting faculty at international accounting body ICAEW (Institute of Chartered Accountants in England and Wales).
Much is at stake, with the United States playing a central role. Successful alignment is essential for the US to decide whether to adopt IASB rules outright. This would in turn reassure Japan, India, Singapore and China to fully commit to IASB rules as well and create a truly common accounting language for investors.
But the US has repeatedly delayed its adoption decision as alignment drags on and may now be tempted to push it back further, raising concern that momentum risks fizzling out.
Read the whole thing here.Â
It’s a Big Sweet World