Last week Sir David Tweedie, Chairman of the International Accounting Standards Board (IASB), told the attendees of the US Chamber of Commerce event, “The Future of Financial Reporting: Convergence or Not?” that “thereare two key activities coming to a head this year:
- The IASB and the FASB are now nearing the completion of a nine-year program to improve International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP) and to bring about their convergence.
- The US Securities and Exchange Commission (SEC) will make a decision on the use of IFRSs by US domestic companies.
In her analysis of Tweedie’s remarks, Edith Orenstein of the Financial Reporting Blog says “Tweedie gave three overarching reasons for the U.S. to make the decision to adopt IFRS this year:”
- With over 100 countries having currently adopted or committed to adopt IFRS, it is in the United States’ economic interest to be part of the global system.
- Delaying the adoption of IFRSs imposes unnecessary costs and risks on US companies.
- The window of opportunity will close if a decision is delayed.
Orenstein also wrote:
I highly recommend direct reference to Tweedie's speech in its entirely; for observers of international accounting standard-setting, this is a seminal speech. (And, if you can listen to the webcast of the program, you'll receive the added bonus of hearing Tweedie's well-known sense of humor in some unscripted jokes. For example, you can hear about some concerns he had about what was growing in his garden, and his performance as a soccer player.)
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