Will Globalization Gobble Up GAAP?
By Dave Burt, CPA - Recently I read a Journal of Accountancy (July 2007) Q&A with Sir David Tweedie, the Chairman of the privately funded International Accounting Standards Board (IASB) headquartered in London, England. “The IASB is committed to developing, in the public interest, a single set of high quality understandable and enforceable global accounting standards that require transparent and comparable information in general purpose financial statements.”(CPE Direct July-September 2007) According to the readings, the IASB and FASB are working together on numerous short term and long-term “convergence” projects with the goals of “pull[ing] the principles into line because the standards were basically OK, and the other set where we [IASB & FASB] both had outdated standards, which we would replace by writing new ones together.” By 2012, over 150 countries will have recognized IASB’s International Financial Reporting Standards. And by 2011-12, FASB and IASB will be “pretty much the same.” Their “GAAP” is growing in acceptance in the global financial market (GFM) and, without much effort; I can picture it becoming the international financial reporting benchmark by 2015. And you say, silly boy, why do you say that? Reason: the IASB intends on “protecting the brand” against nationalizing. Example: they forced Australia to remove their national reference from Australian International Financial Reporting Standards. The result will be that IFRS will remain pure, locally untouched and globally accepted. In the future, either you’re IASB “certified” or your not. While FASB will always have a place at the table, it will be a much bigger table with perhaps Sir Tweedie standing up carving the turkey.