Are we lost on the road to IFRS?

What's going to happen with IFRS? It depends on who you ask ... and when.

Less than a year ago, U.S. adoption of international financial reporting standards was all but certain. Former SEC Chair Christopher Cox, a huge IFRS proponent, had helped drive through the SEC's "roadmap" for how public companies should make the switch, and all lights on the road to IFRS were green.

But Cox is gone, his successor is slowing things down considerably, and IFRS is no longer the sure thing it once was.

In the past few months, we've seen the International Accounting Standards Board take further steps forward and IASB Chair Sir David Tweedie call us out by asking, "Where is the United States?"

Meanwhile, the stateside excitement over convergence has dulled considerably, U.S.-based companies aren't really sure what IFRS means for them, and some naysayers are actually saying that switching to IFRS might be bad for the United States.

So it's somewhat surprising that, despite all that recent negativity, nearly 90 percent of finance executives believe mandatory IFRS adoption in the U.S. is inevitable and 80 percent of U.S. companies are performing or have performed a high-level IFRS assessment. That's according to a new Deloitte survey.

Do the folks in the trenches know something that the critics don't? My money's on "Yes." Just in case, though, we're offering a bunch of IFRS programs that take an in-depth look at international standards. Check 'em out and decide for yourself.

• Sept. 23-24: Are You Ready for IFRS? Moving Beyond the Basics
• Dec. 17: The Impact of IFRS and Other Global Standards on Private Entities
• Dec. 18: International versus U.S. Accounting: What in the World is the Difference?

What do you think? Where is IFRS going, and how quickly will it get there?

Comments

[Peter A. Margaritis, CPA, MAcc]

I believe that IFRS is not dead and in the next 30 – 60 days the SEC is going to comment on the roadmap. One of the reasons that the SEC has been quiet on the IFRS issue is that a full-time Chief Accountant had not been appointed. However, on August 25th, Mary Schapiro named James Kroeker as the new Chief Accountant. That hurtle has been cleared. But what changes will the SEC make to the current roadmap. Will they extend the mandatory implementation dates to 2016, 2017, and 2018, or further? Will they keep the current roadmap but drop the “vote” in 2001? It is hard to say at this point and we will have to wait and see. The Deloitte study should be an excellent indicator that the adoption of IFRS in the U.S. is inevitable.

Another reason why I feel IFRS will continue to move forward is the pressure the G20 is placing on the U.S. The April 2009 G20 meeting in London, the G20 stated in a document entitled “The Global Plan for Recovery and Reform” they state,
“We have today also issued a Declaration, Strengthening the Financial System. In particular we agree… to call on the accounting standard setters to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards.”
The next G20 meeting is scheduled for September 24th and 25th in Pittsburgh. Look for them to discuss in greater detail the future plans for global adoption.

The debate and discussion around how the worlds largest capital market is going to adopt IFRS has been healthy but it is now time for the SEC to set a permanent roadmap and let the U.S. be the leader in the global capital market system.

[Bill Sheridan]

Terrific comments, Peter. Thanks for the updates! Sounds like there'll be plenty to keep an eye on in the coming days.