IFRS

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

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IFRS adoption: Yet another fatal flaw and a heaping dose of ridiculeRead More »

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.

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We can finally bury IFRS convergadoption ™?Read More »

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”: …

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

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:

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  Convergence or Co-whatever-its-called-today with IFRS is Co-drifting-awayRead More »

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:

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

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.

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Perhaps IFRS can be postponed to deathRead More »

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: …

Another reason IFRS are a really bad ideaRead More »