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IASB warns of weakening ties with FASB

Wednesday 3 August 2011 - by Andrew Hickley

The International Accounting Standards Board has warned it will stop engaging in new joint projects with its US counterpart if the US Securities and Exchange Commission does not endorse its IFRS standards.

The IASB's vice chairman, Ian Mackintosh, made the claim during a webcast in which he answered industry questions about the IASB's recent consultation over its future strategy.

Cooperation between the IASB and the US Financial Accounting Standards Board "really depends" on the US's decision on whether to adopt the standards, he said.

While the IASB would look to finish the projects it has already initiated with the FASB, "I wouldn't have thought that we would work jointly with them on new projects," Mackintosh admitted.

He added that the "global constituency" of IFRS users have a "right in the process" to ask for improvements in areas that are troubling them, which could be considered more important than continuing to align US and IFRS standards.


"My personal opinion is that there would be less joint work with the FASB going forward."

The SEC has yet to decide whether to adopt the standards - despite intense lobbying from the IASB - with a 2011 deadline to make its decision closing in.

Mackintosh also sought to reassure IFRS users that the organisation would not shy away from the principles-based approach it endorses as it attempts to clamp down on international differences in standards.

A recent IFRS Foundation consultation focused on stopping international divergence as more nations begin to adopt the standards.

When asked if the IASB would be issuing more rules, instead of principles, to ensure more convergent reporting, Mackintosh replied "it can always lead to that and it is one of the problems we have to be careful about".

"We want to stick with being principles-based, we don't want to move to being rules-based," he added.

The standards setter will also need to be cautious when providing guidance on IFRS standards to nations as they proceed with adoption, he said, because this advice can be seen as limiting the actions businesses may make.


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READERS' COMMENTS
2011-08-05 11:38:02 | Anonymous
I think the FASB/SEC should stop being so high-minded and get on board with creating a truly international accounting standards system.

Good on IASB!
2011-08-05 02:07:28 | al vega
Part of the reason for the creation of the FASB was to fix the APB, because the APB was criticized because its "generally accepted accounting principles" were too vague, ie, they were principle based.
Then the FASB was created to fix this problems by being more specific and eliminating alternatives, ie being "rules based". Therefore now we want to go back to "principle based" rules per the IASB. We go back to the beginning that did not work.
2011-08-04 19:27:17 | Anonymous
I couldn't be happier if they went away. It has already been said, don't go away mad , just go away. We do not need the IASB.
2011-08-04 19:23:55 | Anonymous
I agree 100% with the IASB. Your stand point is very much valid and you should stick to it, irrespective of what FASB is able to converge or not. Because Global Accountability has higher significance to International community than compartmentalising to US , or European , etc standards. Principles are more important than rules and enforcement of just rules devoid of ANY principle by the US also has contributed to the Global Turmoil. MEANS ARE AS IMPORTANT AS GOALS!
2011-08-04 18:34:19 | Andy
The arrogant Europeans are at it again. Hey, news flash IASB, NO we don't want to wind up like Greece and Spain and Portugal. Deal with your own problems before you mess with us!
2011-08-04 17:34:33 | Ralph Adamo
Well please don't go away mad, IASB! (Just go away.)
2011-08-04 15:49:56 | Anonymous
Threats and bullying don't help the IASB's cause.
2011-08-04 15:33:45 | Larry Perry, CPA
Hurrah! If a straw poll of U.S. accountants were taken, my guess is that a substantial majority of respondents would vote to send the IASB packing! We don't need more distance from the IASB, we need separation!
2011-08-04 15:18:02 | Charles Richard Baker
This is absurd. The United States and the FASB have been the world leaders in accounting standards setting. Without the FASB the IASB would not exist at all. It is rather for the IASB to follow the lead of the FASB and not the other way around.

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