10 years of IFRS: Reflections and expectations
02 Nov 2012
The 'Australian Accounting Review' has recently published a special edition that marks the 10th anniversary of the International Accounting Standards Board (IASB) with research papers exploring the impact of IFRS on standard setting, financial reporting practice and accounting education from the perspectives of standard setters, practitioners and academics. Among the articles are contributions by Warren McGregor, IASB Board member for ten years, Kevin Stevenson, AASB Chairman, and Paul Pacter, IASB Board member and former IAS Plus webmaster.
The special edition of the Australian Accounting Review, a leading practitioner-focused journal, appears in two parts: in the September and December 2012 issues.
The first part of the forum includes a set of papers reflecting on the IASB's activities over the past 10 years, the relationship of the IASB with national standard setters, and two papers providing background and insights into the important question of if, and how, the United States may adopt IFRS.
Warren McGregor, IASB Board member for the first ten years of the IASB's existence, describes how the IASB evolved from "a type of accounting 'think tank' with a mandate to develop high-quality accounting standards that could be adopted on a voluntary basis by countries around the world" into a body that had to learn to deal "with the politics and other pressures that accompany attempts to change accounting practices in highly controversial areas".
Kevin M. Stevenson, AASB Chairman and former member of the IASB staff, analyses the changing relationship between the AASB and other national standard setters and the IASB. He critically looks at the attempts that are made to establish more formal links with domestic and regional groupings of standard setters as evidenced by the IFRS Foundation's proposals for the creation of the Accounting Standards Advisory Forum (ASAF) published on 1. November 2012.
Mr Stevensons article is balanced with a contribution by Jessica Lion, an IASB staff member, presents the IASB's perspective in the debate around the relationship between the IASB and the national standard setters. In her article she looks at the benefits and challenges of a "complex but vital relationship to both the global and the domestic standard setter" and how the benefits can be maximised.
Paul Pacter, IASB Board member, regrets that "[i]n 2011, the International Accounting Standards Board (IASB) was so engrossed in progressing some major projects toward completion, along with a change of board leadership, that an important milestone passed by without much celebration – our 10th anniversary". His contribution lists and honours the IASB's achievements over the past 10 years.
The forum concludes with two papers focusing on the role of the US in developing global standards over the last 10 years. Holger Erchinger outlines recent developments at the US Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) in relation to the possible adoption of IFRS and shows how the SEC's 2010 IFRS Work Plan led via the SEC staff paper exploring the 'condorsement' approach for IFRS adoption in the US to the SEC final staff report
Donna L. Street complements Mr Erchinger's paper by delving more deeply into forces shaping US decisions about IFRS and the implications of possible adoption models. Her strong conclusion is that "[t]he SEC leadership has repeatedly voiced support for one set of globally accepted accounting standards. Since the rest of the world will not adopt US GAAP, IFRS is realistically the only visible road to global standards".
We are grateful to the editor of this special issue, Professor Ann Tarca, for pointing it out to us. The second part of the forum, to be contained in the December issue, will complement the first by exploring the adoption of IFRS in a developing economy, IFRS educational issues and initiatives, and practitioners’ reflections on the impact of IFRS together with suggestions for future research.