April 27, 2009 During the past several years, the move toward a single set of high quality, globally accepted accounting standards has gained momentum. For example, in 2005 the European Union began requiring companies incorporated in its member states whose securities are listed on an EU-regulated stock exchange to prepare their consolidated financial statements in accordance with International Financial Reporting Standards (IFRS). In 2007, the U.S. Securities and Exchange Commission (SEC) agreed to accept from foreign private issuers financial statements prepared in accordance with IFRS without reconciliation to U.S. Generally Accepted Accounting Principles (GAAP). In September 2008, the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) updated and reaffirmed their “Memorandum of Understanding” to converge all major accounting standards (such as revenue recognition and leasing) by 2011 in light of a possible move to IFRS. Most recently, the SEC released for public comment a proposed roadmap for adoption of IFRS by public companies in the U.S. Comment letters were due April 20, 2009 (extended from February 19, 2009). While many expressed support for the goal of high-quality globally accepted accounting standards, the request for comments produced numerous critics of the SEC’s proposed roadmap. Commentators had serious concerns about the cost of adoption, the benefits of adoption compared to convergence, and whether IFRS were in fact as good as or better than U.S. GAAP. See Full Document: |
