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'IFRS at a critical crossroad'

  • IASB (International Accounting Standards Board) (blue) Image

13 Dec 2010

The IASB has posted to its website a section of the keynote speech entitled 'Regulatory Reform and IFRS at a Critical Crossroad' at the FEI conference, given by IFRS Foundation Trustee Harvey Goldschmid.

In his speech Mr. Goldschmid describes two basic scenarios that are probable if the US Securities and Exchange Commission (SEC) comes to a negative decision on IFRS adoption:

"First, the coalition of nations supporting IFRS could break apart. Rather than two sets of accounting standards, IFRS and U.S. GAAP, we could go back to pre-2000 fragmentation. Many national accounting systems would exist. The cost, in terms of lack of transparency and comparability, higher accounting expenses, etc., would be extremely large.

The second basic scenario is even worse from a U.S. perspective. The coalition in support of IFRS could hold and the U.S. would become isolated. The U.S. would no longer play the large and constructive role it now plays in IFRS development and oversight. I believe that without active U.S. participation the overall quality of the international accounting standards would deteriorate. Remember, there is less concern about transparency and investor protection in some other parts of the world."

Click for keynote speech excerpt (link to IASB website).

 

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