Those of us serving the business and NPO communities from smaller firms need to keep current on issues that are going to change our future. IFRS is one of those issues.
“Convergence Flaws” v. Convergence Spin by Dr. Tom Selling, CPA, contrasts two speeches on IFRS. One by David Tweedie, the IASB chair, and the other by David Reilly, a reporter from the Wall Street Journal. The first one is obviously a push for adoption of IFRS. The second one raises major reservations.
A few points from Mr. Reilly’s speech that Dr Selling highlights:
-how could there possibly be comparable enforcement of accounting rules from country to country?
Whom should the capital markets serve?
-should accounting rules serve investors, issuers raising capital, or political rulers? Several dimensions to that question – you need to read the post to get a feel for what is involved. That particular question needs to be resolved before IFRS can be fully developed.
Why are we going to do this?
-The more I learn of the issues the bigger that question becomes to me. After pondering the unintended consequences of likely pushing capital outside the US, letting every country choose its own long list of carve-outs, making accounting an exercise in increased subjectivity, and making it difficult to audit personal preferences, I’m a bit fuzzy on the pro arguments.
Hat tip to Professor David Albrecht for highlighting Dr. Selling’s post. I’m not familiar with the landscape on the IFRS discussions. David Albrecht says Tom Selling is the best writer around on the topic. I suggest you visit both their sites.