"The quality of financial information produced by IFRS is very high, thanks to the work of the IASB, but also to the convergence project with the United States. And a decade of use by both advanced and developing economies has shown that our mission of a s ingle set of high global accounting standards is desirable, achievable and in my view, inevitable." [IASB's Ian Mackintosh, The Maturing of IFRS]
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With IFRS Waiting in the Wings, Will Private Companies Get GAAP of Their Own?
- GoingConcern
- April 13, 2010
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
A blue ribbon panel on private company accounting is holding its inaugural meeting Monday, to assess how financial reporting standards can best meet the needs of users of US private company financial statements, which are mostly for bankers and other types of lenders.
The panel, formed by the Financial Accounting Foundation, the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy, will meet five times throughout the year and will issue a report with recommendations on the future of standard setting for private companies by the end of the year.
The debate has resurfaced after the International Accounting Standard Board issued international standards for private companies last July (called IFRS for SMEs). Financial experts have been discussing this topic for decades. For instance, in 1996, the Financial Executive Research Foundation issued a paper titled “What do users of private company financial statements want?”
Some of the old and new questions the panel will address:
• What is the key, decision-useful information that the various users need from GAAP financial statements?
• Are current GAAP financial statements meeting those needs?
• How does standard setting for private companies in the US compare to standard setting in other countries, both those that have adopted IFRS for small and medium-size entities and those that have not?
To the extent that current GAAP is not meeting user needs in a cost-beneficial manner, what are some possible alternatives or private company standards?
Even if GAAP is found wanting, however, the panel might not be all that keen on IFRS as an alternative, given the limited experience of US companies with the international regime and rising skepticism on the part of the Securities and Exchange Commission about the independence of the body setting international standards.
Not that public or private US companies are eager to switch to IFRS, which will be costly and cumbersome. At this point, it seems as if private ones would rather have the accounting devil they know, except they no doubt wish it were a bit less hellacious on their results. And that’s been pretty much a forlorn hope for years.
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Here’s the SEC’s Final Report on a Work Plan for Global Accounting Standards
- Caleb Newquist
- July 13, 2012
Nothing like dropping this on everyone at 6 pm. On a Friday. In the middle […]
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Some French Guy Still Trying To Tell the U.S. What to Do Re: IFRS
- Caleb Newquist
- September 30, 2010
Look, pal. We get that you’re anxious to slap these sets of accounting rules together like an IKEA ottoman. We also get that you and a certain knight want – nay – need the RW&B to be on board.
But we don’t know who you’re trying to boss here. See, we’re fairly certain you’d be speaking German if it wasn’t for us. Furthermore, in case you haven’t noticed, we like dragging things out until the last possible minute. Or just ignoring things until we have a giant mess on our hands and then we try cleaning up. Why would we treat IFRS any different?
We understand it’s a new century, millennium and you guys have a rough go in the World Cup but you can give it a rest.
We’ll get to IFRS when we’re good and ready and just because today is Bob Herz’s last day at the FASB doesn’t mean you need to get all anxious about it:
The US is due to make a decision about whether fully buy in to international standards in the latter half of next year. There has been speculation that the appointment of a new chairman for the US standard setter, FASB, could determine which way the world’s biggest economy will go on international standards.
In a speech yesterday to a conference organised by European financial think tank EUROFI, Barnier welcomed the involvement of the US in the Basel talks on financial regulation. But he added that the US should not part company with IFRS.
“It’s essential that we adopt the same prudential framework. I say this very simply, we cannot afford to take the risk of divergence in this area. And this is also the case for accounting standards,” he said.
EU chief urges US to buy into IFRS [Accountancy Age]