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The end of the road for convergence over accounting standards?

Thursday 10 June 2010 - by Richard Martin


The question now is are we ever going to achieve the single global standard?
It will be difficult for the IASB to backtrack on the mixture of cost and fair value in IFRS9. The FASB has gone ahead with its different proposals based more exclusively on fair value in the clear knowledge of this.

The two have not even been able to agree on an impairment model. Both boards are meant to have been working together on this project, but now admit that they may not be able to reconcile their positions.

A reconciliation would in any case take an extended period. This very visible failure by the two boards on their most important joint project may damage their wider convergence programme and more importantly both of their positions with the highest political levels.

There are two possible ways forward. One is, if there is a sufficiently negative reaction to the FASB’s proposals it may force it towards adopting the IASB’s model. The other is that the US Securities and Exchange Commission may announce proposals and a date for the US to switch to IFRS, which might clinch the issue.




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