With all of the talk lately of market meltdowns, credit crunches and economic bailouts, international financial reporting standards seemingly have taken a backseat.
Truth is, they’re more relevant than ever.
The SEC was expected today to formally release its plan for how public companies should make the switch from U.S. generally accepted accounting principles to IFRS. Now comes word that the release may not come until December at the earliest. (Thanks to Adrienne Gonzalez, project coordinator/creative content strategist for Roger CPA Review, for tracking down that information for us.)
The formal release will come at least three months after the plan was first announced, but heck, no time like the present.
First of all, it could go a long way toward calming the hysteria over fair-value accounting, which some folks have blamed for fanning the flames — if not outright causing — the current financial crisis. I don’t believe it, and neither do a lot of people who are smarter than I,but the fact remains that fair value is being made a scapegoat in some circles. Making the switch to IFRS might help make that argument moot.
Second, there might be political factors at play. As CFO.com’s TimReason writes, IFRS has been championed by SEC Chair Christopher Cox, a Republican. With Barack Obama headed to the White House and Democrats tightening their grip on Congress, a move to global standards might fall under the political microscope soon. There might not be a better time to push IFRS forward.
And that’s not a bad thing. Borders are vanishing. The world continues to shrink, and maybe it’s time for accounting standards to reflect this global environment.
So let’s bring it on. This is a global crisis now. The time has come for global solutions.
What’s your opinion of IFRS? Let us know, then check out these other IFRS resources:
- MACPA IFRS resource center
- AICPA IFRS resources
- IFRS: Implications for CPAs (an MACPA podcast)
- Are You Ready for IFRS? Moving Beyond the Basics (an MACPA program)
- International vs. U.S. Accounting: What in the World is the Difference? (an MACPA program)