A Fresh Point of View on IFRS and the Future of Financial Reporting in the United States
Welcome to AccountingWEB's new "IFRS in Perspective" blog. I'm Bruce Pounder, and I'll be blogging about the role that International Financial Reporting Standards (IFRS) can and should play in the future of financial reporting in the United States. I don’t expect to end the debate over IFRS that exists within the U.S. accounting profession, but I do hope to influence that debate in a positive way. In this initial post, I'll summarize my point of view and explain why I want to share it with you.
As you may know, I frequently speak, write, and consult on financial reporting matters involving IFRS. In my travels and conversations, I find that U.S. accountants have a very poor understanding of IFRS and its implications. I continually see individuals and organizations make decisions about IFRS from a position of ignorance rather than a position of knowledge. And I continually see the adverse consequences that result from an incomplete and/or inaccurate understanding of the facts and issues involved. Because of my experiences, I have chosen to write this blog for the primary purpose of helping U.S. accountants un-learn the many myths and misconceptions that have been propagated about IFRS.
You'll benefit from reading my blog if you currently believe that it is realistic to expect U.S. companies to continue using U.S. GAAP as we know it today. Or if you currently believe that the United States should abandon U.S. GAAP in favor of IFRS. Or—most of all—if you think that sticking with U.S. GAAP or switching to IFRS are our only two options.
In the United States, we have the opportunity to create the future that we want with regard to financial reporting. We are not constrained to choose between two existing, immutable, exclusive alternatives. From my perspective, the optimal path forward for the United States with regard to IFRS does not come with simple choices nor guarantees, and it's important for U.S. accountants to understand that. Post by post, this blog will construct a “business case" for what individuals and organizations in the United States should do with regard to IFRS, what we shouldn’t do, and why.
To be clear, I don't claim to have a monopoly on the truth, nor do I claim to know everything there is to know about financial reporting in general or IFRS in particular. What I have is a unique perspective to share—a perspective that stems from a combination of three things:
- A comprehensive view of the facts supported by verifiable sources;
- A willingness to explicitly state my assumptions and the bases for them; and
- An intense commitment to applying facts and assumptions in a logical way in order to achieve the best outcome for the United States with regard to financial reporting.
I also have an overriding criterion for my posts: I want to write what I would want to read if someone else wrote it. Blogs that simply regurgitate press releases bore me. Blogs that attempt to make a point through fallacious reasoning annoy me. And blogs that get the facts wrong infuriate me. My promise to you is that this blog will be different from other blogs. In each of my posts, I’ll tell you something about IFRS that’s relevant, that’s reliable, and that you’re unlikely to have read or heard anywhere else. And if you have read or heard it before but don’t believe it, I’ll give you a new reason to change your mind.
In summary, this blog won't be an ongoing tutorial about the technical intricacies of IFRS. Instead, by dispelling the plethora of mis-information about IFRS, this blog will establish a rational foundation for Americans to make better personal, managerial, and public-policy decisions about our financial-reporting future—a foundation that's sorely needed today.
Bruce Pounder, MBA, CMA, CFM, DipIFR (ACCA) is an internationally recognized expert on corporate financial reporting and the global convergence of financial reporting standards. He has two decades of firsthand financial reporting experience as the CFO of a privately held corporation and has served as a financial reporting consultant to many public corporations. Currently Bruce is President of Leveraged Logic, a leading provider of educational products and services to accounting professionals. He is the author of the 2010 U.S. Master GAAP Guide (CCH), the Convergence Guidebook for Corporate Financial Reporting (Wiley), and the monthly "Financial Reporting" column of Strategic Finance magazine. Bruce also presents the live webcast series "This Week in Accounting."