Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Posts Tagged ‘arguments against IFRS

IFRS adoption: Yet another fatal flaw and a heaping dose of ridicule

with 2 comments

Apparently it is not yet universally believed that adopting IFRS for the U.S. is a horrible, fatally flawed concept that would harm the U.S. capital markets. I’ll mention yet another catastrophic flaw in the concept after a few jokes at the expense of IFRS.

First, some indication there is still a heartbeat in the otherwise decaying corpse.

I hope there’s still not hope for convergadoption ™

Mentioned before that the New SEC Chief Accountant {is} Weighing Switch to Global Accounting Rules – The new chief accountant is reviewing past work at the SEC on IFRS.

On November 6, the Wall Street Journal reported he hopes in a few months to have “movement” on the issue. Didn’t give a hint what direction he thinks the agency should go.

Professors Paul Miller and Paul Bahnson discuss IFRS at length in their article, IFRS in the U.S.: The opera star has already sung (free registration required).

In the article, they explain that SEC chair Mary Jo White said she thought IFRS adoption might be a good idea in a meeting with the FAF.

A heaping helping of ridicule

Read the rest of this entry »

Written by Jim Ulvog

November 24, 2014, 7:21 am at 7:21 am

Posted in Accounting

Tagged with ,

We can finally bury IFRS convergadoption ™?

with one comment

I believe the answer is yes.

At least that is the conclusion I draw from an article by Michelle Quah at The Business Times: Full convergence on accounting standards no longer achievable: IASB

The paragraphs visible in front of the paywall report that Hans Hoogervorst, Chairman of the IASB, said full convergence with the U.S.

…is no longer an achievable project.

IASB moved forward with their IFRS 9 on financial instruments without any agreement with FASB. The boards are going their own ways.

In the meantime, each country around the world can continue to pick and choose which parts of IFRS it wishes to follow.

Read the rest of this entry »

Written by Jim Ulvog

August 1, 2014, 7:25 am at 7:25 am

Posted in Accounting

Tagged with ,

Description of IFRS in practice – – nation-based, a la carte, & locally tweaked. Now ‘carve-in’. For the public good.

with one comment

Mentioned in an earlier post that the EU is having second thoughts about IFRS. They want formal authority to pick-and-choose which pieces of new IFRS rules to adopt.

Here’s an article from Reuters supporting the idea that pick-and-choose is the preferred approach: EU seeks to increase influence on global accounting rules.

They are wanting to go from a yes/no approach to accepting IFRS rules in full or skipping an entire rule. The new word is they want to “carve-in”: Read the rest of this entry »

Written by Jim Ulvog

November 19, 2013, 7:32 am at 7:32 am

Posted in Accounting

Tagged with ,

Convergence or Co-whatever-its-called-today with IFRS is Co-drifting-away

with 2 comments

The IASB staff have released a report responding to the very lukewarm SEC staff report on IFRS convergence.  Tom Selling at The Accounting Onion characterizes the IASB report as The IASB’s Stages of Grief.

He points out numerous places where there are massive differences between U.S. GAAP and IFRS. A few examples he sees are:

Written by Jim Ulvog

November 20, 2012, 7:57 am at 7:57 am

Posted in Accounting

Tagged with ,

SEC report that doesn’t address when to implement IFRS reads more like a position paper against IFRS

with 3 comments

As expected, the SEC staff released a report on IFRS that does not contain a recommendation on whether to adopt IFRS or when to adopt.

The report is called Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers.

I have not read the full 137 page report, and don’t plan to. As I browsed the first 28 pages, what struck me is the large number of observations in the report that are actually fairly major criticisms of IFRS and reasons not to adopt it.

Here’s a small number of examples:

Read the rest of this entry »

Written by Jim Ulvog

July 17, 2012, 11:03 am at 11:03 am

Posted in Accounting

Tagged with ,

Perhaps IFRS can be postponed to death

with 2 comments

The Wall Street Journal reports that the SEC staff will have a report in a few weeks addressing adoption of IFRS for the US. The report won’t have a recommendation on whether or how to make the switch.

The expectation is a final decision has been pushed off until at least 2013.

The article is Delay Seen (Again) for New Rules on Accounting, by Michael Rapoport.

For more detail that will actually tell the story better for us accountants, check out Tom Selling’s post, What the Chief Accountant’s Resignation Means for the Future of IFRS in the U.S., posted two days before the above article from the Wall Street Journal.

Read the rest of this entry »

Written by Jim Ulvog

July 12, 2012, 8:55 am at 8:55 am

Posted in Accounting

Tagged with ,

Another reason IFRS are a really bad idea

with 2 comments

All economies, cultures, and societies operate the same way, right?

I just realized that’s a fundamental underlying concept of IFRS. One set of accounting rules can be applied consistently in all nations regardless of the divergence of legal systems, regulatory structures, ethical frameworks, and general worldviews.

I realized that is yet one more severe conceptual failure in IFRS after reading Global Accounting Rules – An Unfeasible Aim by professors Stella Fearnley and Shyam Sunder. David Albrecht has reprinted their op-ed in his blog post, UK Prof and USA Prof Against Global Accounting Rules.

Here is the key aha! sentence for me: Read the rest of this entry »

Written by Jim Ulvog

June 12, 2012, 9:48 am at 9:48 am

Posted in Accounting

Tagged with ,

Time to call the game on IFRS adoption and go home?

with one comment

That’s the argument from Jim Peterson at Re:Balance in his post, Unification of Global Accounting Standards? It’s Time to Call Time.

He is responding to the three-post series from Tom Selling in The Accounting Onion that I summarized here.

Mr. Peterson thinks it’s time to call the game.

His reasons?

Read the rest of this entry »

Written by Jim Ulvog

April 12, 2012, 8:10 am at 8:10 am

Posted in Accounting

Tagged with ,

10 invalid arguments in favor of IFRS

with 3 comments

Professor Tom Selling provides presents 10 arguments provided by others who are in favor of IFRS and then explains why those arguments are incorrect.  Actually, he uses the word false.

He provides some background on how we got to this place and starts the discussion at 10 Claims in Support of IFRS Adoption by the SEC – and Why They are False (Part One of Three).

He continues the discussion in part two and part three.

His discussion is quite lengthy, so get a large, fresh cup of coffee or an extra-large soda and settle in for a long read. Even this recap will run quite long.

Here is his list with my extremely short paraphrase that won’t come close to doing justice. Read the rest of this entry »

Written by Jim Ulvog

April 10, 2012, 6:56 am at 6:56 am

Posted in Accounting

Tagged with ,

Arguments against IFRS adoption – 10 problems with claims in favor

with one comment

Just a quick note for the large number of people landing on my blog today after searching for arguments against IFRS adoption – Be sure to visit Dr. Tom Sellings’ blog, The Accounting Onion

Three great posts that I plan to comment on later, but you might find valuable today. They were posted this week, so they  may not yet be sorting high on the search engines. Check out all three parts.

 Ten Claims in Support of IFRS Adoption by the SEC – and Why They are False

You will also want to visit Dr. David Albrecht’s blog, The Summa.

Some of my other posts are here, here, here, and here. Or use the search button on top right corner.

 

Written by Jim Ulvog

April 3, 2012, 17:55 pm at 5:55 pm

Posted in Accounting

Tagged with ,

Maybe adopting IFRS isn’t a foregone conclusion

with 2 comments

Perhaps it is because I’m attentive to the issue, but it seems doubts are spreading about the wisdom of adopting IFRS.

Rueters had this story: Analysis: Doubts emerge over U.S. move to global accounting

Key thread in this article: there isn’t, and won’t be, a uniform standard for all countries. 

Read the rest of this entry »

Written by Jim Ulvog

July 26, 2011, 7:00 am at 7:00 am

Posted in Accounting

Tagged with ,

Another critique of IFRS – it requires honest judgment

with 3 comments

IFRS hasn’t achieved consistency in financial reporting in countries where it has been implemented, even amongst firms in the same industry.

Consistency between countries is low because:

IFRS has been filled with carve-outs, special deals, exceptions, and time-freezes; in short, countries are adopting their own national brands of IFRS

In addition, principles-based accounting hasn’t cleared up the off-balance-sheet financing issue where IFRS has been adopted.

These are some of the secondary criticisms that Professors Anthony Catanach and Edward Ketz raise in their post, IFRS is for Criminals.

Read the rest of this entry »

Written by Jim Ulvog

July 9, 2011, 7:00 am at 7:00 am

Posted in Accounting

Tagged with ,

A few troublesome questions that haven’t been asked about IFRS

with 2 comments

In a long post in advance of the roundtable held this week by the SEC on IRFS, Professor Tom Selling gives lots of inside-baseball info on the roundtable.  See the post No News from the SEC on its IFRS Roundtable is Bad News

 Later in the article he raises some superb questions he would like to see asked, but doubts will be discussed. Some examples:

 Why are we doing this?

Read the rest of this entry »

Written by Jim Ulvog

July 8, 2011, 8:10 am at 8:10 am

Posted in Accounting

Tagged with ,

Arguments for adopting IFRS are weak, arguments against have validity. Therefore we obviously should adopt IFRS.

with 2 comments

That is my (biased) summary of the reasons to adopt IFRS, as explained in an article by Professor Christian Leuz, Accountants of the World Unite!: Business Class

Having already taken an implied position that IFRS is not a good thing for the United States, I guess I will jump in further.

Read the rest of this entry »

Written by Jim Ulvog

June 28, 2011, 10:38 am at 10:38 am

Posted in Accounting

Tagged with ,

Is IFRS adoption on the ropes?

with one comment

Actually, Tom Selling thinks it is dead. Maybe.

See his post, IFRS Adoption is Dead! (I Think).

Read the rest of this entry »

Written by Jim Ulvog

May 10, 2011, 9:03 am at 9:03 am

Posted in Accounting

Tagged with ,