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.


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...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.