Specialised industry standards – IASB and FASB contrasted
10 Jun 2007
In his address at the 26th Annual SEC and Financial Reporting Institute Conference at the University of Southern California, FASB Chairman Robert H Herz spoke about Specialised Industry Accounting and Reporting: Too Much of a Good Thing?
So without judging whether and to what extent having lots of specialized industry accounting and reporting guidance is a good or bad thing, we might ask how we got to this current state in the U.S. For while there is a certain degree of industry specific accounting and reporting guidance in other parts of the world and in IFRS, it is no where as extensive and as differentiated as it is in our country. For example, UK GAAP does not include very much of it, relying instead on broader principles and practices that have evolved, in Australia and New Zealand they have deliberately tried to avoid special accounting for different industries, focusing instead on what they term 'sector neutral' accounting, and while IFRS encompasses some industry specific accounting and disclosures, such as that relating to financial institutions and for agriculture and they are working on accounting for insurance contracts and on accounting for extractive activities (oil and gas and mining), the IASB clearly does not intend to develop U.S. style industry specific guidance; nor do I think they believe that it is generally a good thing. |