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IASB: Global accounting standards “desirable, achievable, and … inevitable”

Wednesday 27 August 2014

According to Ian Mackintosh, vice-chairman of the IASB, the ultimate aim of establishing global accounting standards will be achieved at some point, saying "IFRS has become the de facto global language of business, and over time, the IFRS map of the world will be complete…" and further stating that global accounting standards are "desirable, achievable, and … inevitable".

Over 100 countries have now adopted IFRS, although some countries (including the USA), remain undecided. Speaking in South Africa, Mackintosh addressed this - saying that differing standards in individual countries "adds cost, complexity, and translation risk to companies and investors operating in today's global marketplace."

He added; "As economic globalisation continues apace, so too will the force of the arguments in favour of IFRS adoption within these remaining jurisdictions… That is why I believe that we should not fret too much about the timing by which we get every jurisdiction onto global standards."

Meanwhile, the US debate about adopting (or permitting) IFRS is ongoing. Some important players such as the AICPA are publicly in favour of a single global set of accounting standards, whilst others are strongly against. The ultimate decision still remains with the Securities and Exchange Commission (SEC) and there have been recent signs that the SEC is at least considering whether to give U.S. public companies an option to use IFRS for financial reporting.

Formal efforts to converge IFRS and U.S. accounting standards (US GAAP) have recently ground to a halt, and are unlikely to start again soon. In May, the IASB and FASB released a historic, converged revenue recognition standard, but they have had difficulty achieving convergence on two other projects: leases, in which the boards are moving forward withdifferent approaches, and financial instruments. The IASB Chairman Hans Hoogervorst recently stated that full convergence between IFRS and US GAAP is unachievable.

To help keep you updated on this important topic, IASeminars offers a number of courses dealing with IFRS, US GAAP and the differences between them. Examples include:

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