Mentioned in an earlier post that the EU is having second thoughts about IFRS. They want formal authority to pick-and-choose which pieces of new IFRS rules to adopt.
Here’s an article from Reuters supporting the idea that pick-and-choose is the preferred approach: EU seeks to increase influence on global accounting rules.
They are wanting to go from a yes/no approach to accepting IFRS rules in full or skipping an entire rule. The new word is they want to “carve-in”:
In a challenge to IASB authority, Maystadt also recommended changing how the commission endorses a standard, broadening it out from a simple yes or no to include the ability for “carve ins” – or local tweaks to the rules – but only to improve the “public good”.
How would the last part of that sentence be for a criterion to evaluate a new IFRS rule? It meets the “public good” as each national body decides its public good.
Amongst other problems seen by the EU group addressing accounting rules is that the IASB is putting too much emphasis on trying to converge with U.S. standards.
Well, not that my opinion matters to anyone, but I would agree fully.
They, and FASB, are both spending too much time trying to converge.
The president of the French accounting standards board essentially acknowledges that what is already in place today is for each country to choose which parts of IFRS it does and does not want to adopt. His comment:
Haas said the “carve in” formalizes what is already happening across the world, such as selective implementation by supervisors and companies.
If I’m reading that right, he actually is making the accusation that individual companies are deciding what parts of IFRS to implement. I’ve not noticed that comment before.
The chair of the IASB board of trustees call this “a la carte”. I’ll quote the article so you don’t think I’m making this up. He…
fired a warning shot at the European Union on the danger of “nostalgia” or nation-based accounting.
“If some jurisdictions, particularly the larger ones, go back to the a la carte model then we should not be surprised that others will follow,” Prada said in a speech in Tokyo.
He thinks a la carte isn’t already in place? Oh, I get it. As chair of the IFRS board he has to claim IFRS isn’t already there.
Actually, IFRS has long been nation-based.
IFRS has been a la carte for a while.