Will the US GAAP and IFRS merge?
Still in Gothenburg at the Nordic CFO summit, I chaired a session this morning with International Accounting Standards Board chairman Jan Engstrom.
He predicted the SEC would begin accepting IFRS accounts in the next three years. But his comments on the liklihood of the US ditching US GAAP in favour of the new standards were more enlightening.
'The day a US soldier is serving under a non-US general is the day they will accept IFRS,' he said. 'It won't happen.'
Notwithstanding that, the IFRS march continues with Engstrom telling us to expect the first stab at an SME standard as early as September.
'I expect it to be much criticised,' he admitted. But, he added, if it can be successfully refined over the next decade, the IASB will be in a strong position to frame a case for true global covergence.
Interesting comment. If China fully converges to IFRS that should strengthen the case for the global use of IFRS.
Posted by Philip Woodgate | June 1, 2006 6:15 AM
No-one seems to have considered the potential impact of the flight of capital from the US to EU following SOX. Educate 'em early and maybe they learn new 'habits' - including the idea of true and fair rather than relying on rules driven systems.
Posted by Dennis Howlett | June 3, 2006 3:43 AM
Dennis
It's interesting. When I was in China last year there was plenty of talk about Chinese companies avoiding US listings because of the regulatory burden. Even the head of NASDAQ has made similar noises lately.(http://www.accountancyage.com/accountancyage/news/2156340/nasdaq-lobbies-lighter-touch)
Presumably the regulatory burden will even out over time (either EU gets more onerous, the US less so or, more likely, a combination of the two). Convergence strikes me as more of a long-term strategy, maybe even a necessity.
Posted by Damian Wild | June 5, 2006 11:44 AM