Next year U.S. public companies will find out if they have to adopt international accounting standards – just as they are implementing a host of new FASB rules.
Marie Leone, CFO.com | US
May 18, 2010
Mark to market is a cornerstone or pillar of International Financial Reporting Standards. MTM was a contributing factor to the man caused disaster we refer to as the financial crisis of 2008. MTM was approved by FASB in 2006 and just two years later the global financial system collapsed on itself. Will IASB surrender MTM and accept the more conservative approach of lower of cost or market? MTM puts all financial statements into the realm of pure speculation. Pure speculation like the oil commodity bubble from March 2007 - June 2008, is bad for the global economy unless we intent to centrally plan the global economy and control markets. I don't see any flexibility from Sir Tweedie on MTM.
Posted by Joe Jefferis | May 26, 2010 09:57 am
The proposed changes to US GAAP are, for the most part, driven by convergence projects with the IASB. It is almost certain that we are heading toward a global set of accounting standards. What is not clear is whether that will be a single set of standards under IFRS, the result of convergence of various country specific standards across the globe, or some combination. This is a matter of much debate here in the US, but the key point is that US GAAP will undergo significant change in the next few years. A shift from converged US GAAP to IFRS will be challenging, but far less so than what members of the European Union experienced since adopting IFRS in 2005. Challenges will certainly arise during conversion, but it is a manageable project. The key is anticipating and eliminating convergence obstacles now, while remaining focused on the factors that will ultimately improve business. -John Bernardi, MorganFranklin
Posted by Julie McKinney | May 25, 2010 11:06 am
One thing to note: these are joint FASB/IASB projects. It's not just US GAAP that is changing; IFRS is undergoing an overhaul as well. If a company were to adopt IFRS early, it would still be facing major changes in all the areas listed in the article. The bottom line is that by 2016 there could be little difference remaining between US and international accounting rules.
Posted by James Fuehrmeyer | May 25, 2010 07:38 am© CFO Publishing Corporation 2009. All rights reserved.