International Financial Reporting Standards Draft Released

Initiated by a meeting between the U.S. Securities and Exchange Commission (SEC) chairman William Donaldson & EU Internal Market Commissioner Charlie McGreevy in April, the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) met together in London in June. The topic of discussion was the convergence of U.S. and International accounting standards.


Advertisement


Click Here
Cougar Mountain has all the features of the high-end accounting products at an affordable price. Fully integrated modules including our award-winning Point of Sale product mean you only enter data once - saving time and ensuring accuracy. Cougar Mountain is the answer for small to mid-sized businesses that have outgrown their initial accounting package.
Learn more!


Cougar Mountain Home Cougar Mountain Accounting
Sign up for a Web Demo Cougar Mountain Point of Sale
Request a Call Cougar Mountain FUND



In this conference, the two groups mapped their convergence plans as the Securities and Exchange Commission (SEC) made bullet points of the implications of their discussion. Their perspective was based on U.S generally accepted accounting practices (GAAP) standards. There would be several but the main reason for such a convergence would be for the reduction of the cost of capital in an international world.

"When I speak of IFRS/US GAAP convergence, I do not expect the two sets of standards will necessarily produce identical financial statements. But I do consider it necessary that convergence results in close alignment of the accounting for the same, or essentially the same, transactions, generally comparable results in trends and a continued co-operative will to reduce differences over time, as well as the transparent understanding of any significant differences," said SEC chief accountant Donald Nicolaisen speaking with the Financial Director.

Most world accounting standards mirror U.S. standards that are specific and rules-based versus principle-based. U.S. rules are not brief by any means. The discussions went toward international standards based on U.S. standards instead. In the face of Sarbanes-Oxley, this was the best path.

International accounting standards is still a far goal to Europeans and Americans but other countries like China and Japan are voicing interest as well. There will be a need to incorporate national and regional differences. The content of these International Financial Reporting Standards (IFRSs) is surely in the hands of politicians and regulating organizations.

The British Accounting Standards Board (ASB) has raised questions with the first draft of the IASB/FASB standards. They packaged their issues and proposals in a consultation document. They seemed to have particular issue with mergers and acquisitions.

“All parties interested in financial reporting should be aware that this represents a major change in UK requirements,” said ASB Chairman Ian Mackintosh in the consultation document. “We urge our constituents to make their views known to the IASB and to the ASB, so thay can be fully considered both in the international context and as regards their possible implecation in the UK.”

“The ASB is a respected body and has areputation for good thinking. It is an able lobby group,” said Ken Wild speaking with the Financial Director. Wild is the global head of IFRS at Deloitte and Touche and added, “If the ASB thinks there is something wrong it will say so and this could see the IASB and FASB make changes to the standard.”

You may like these other stories...

A proposal issued by the Governmental Accounting Standards Board (GASB) last week explains how fair value measurement should be defined for state and local government financial reporting.The exposure draft, Fair Value...
By Jason Bramwell The board of trustees of the Financial Accounting Foundation (FAF) finalized a new policy on November 19 that provides the Governmental Accounting Standards Board (GASB) with direction on what...
By Jason Bramwell The Governmental Accounting Standards Board (GASB) is now offering a free online toolkit designed to assist preparers and auditors of state and local government pension plans with implementing new...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.