I thought IFRS in the US was dead. In case you didn’t know, I have a fairly strong opinion on the issue.
A presenter at the CalCPA’s Accounting and Auditing Conference on April 25, 2017 had the following comment on IFRS at the end of the presentation:
Death, taxes, cockroaches, and IFRS aren’t going away.
My immediate thought:
Unfortunately, that now seems to be true.
IFRS is baaaack
He perceives the pendulum of discussion on IFRS is swinging back to the topic being on the table.
His comments consistently contained the inference that IFRS is one body of knowledge, consistent in its application in every country across the planet that has adopted the rules.
Entertaining in his description of the differences between GAAP and IFRS are that valuation reserves can be reversed when the conditions requiring the writedown have reversed and that PPE is revalued regularly. A follow on speaker addressing other issues reminded us that IFRS uses fair value for everything, including property.
Let me highlight those two points.
Valuation reserves can be reversed when management says so.
And you thought cookie jar reserves in the U.S. was an issue now? You ain’t seen nuthin’ yet!
Can you even fathom how many tens of thousands of appraisers will be needed to reset the value of every piece of property (land, building, vehicle, and every piece of manufacturing equipment) every year in every company? Public companies may need to pay for as many appraisers as the Big 4 currently have auditors.
Oh, and then the remeasured value on every piece of equipment will have to be audited. Every year. With testing of the IC over revaluation. We’ll need to train up more thousands of appraisers to work for audit firms.
Drive another stake
The presenter called on the audience to take up the issue of IFRS.
I shall do so.
Here is my contribution to the effort:
In my feeble attempt to drive another stake into IFRS and possibly, perhaps, maybe contribute to the effort to separate it from association with death and taxes as an inevitability of life, I shall link to my previous articles on IFRS.
To start your leisure reading, here are two articles with my favorite titles:
- 6/28/11 Arguments for adopting IFRS are weak, arguments against have validity. Therefore we obviously should adopt IFRS.
- 11/19/13 Description of IFRS in practice – – nation-based, a la carte, & locally tweaked. Now ‘carve-in’. For the public good.
Here are some more of my favs:
- 11/13/13 While on IFRS death watch, GOA calls subject of said watch a swindle
- 7/17/12 SEC report that doesn’t address when to implement IFRS reads more like a position paper against IFRS
- 7/12/12 Another reason IFRS are a really bad idea
- 4/12/12 10 invalid arguments in favor of IFRS
To fill out your list of reading, here are the remaining posts I’ve written on IFRS:
- 3/28/11 AICPA interview with FASB chair on revenue recognition – how that illustrates the issue with IFRS too
- 5/10/11 Is IFRS adoption on the ropes?
- 7/8/11 A few troublesome questions that haven’t been asked about IFRS
- 7/9/11 Another critique of IFRS – it requires honest judgment
- 7/26/11 Maybe adopting IFRS isn’t a foregone conclusion
- 4/3/12 Arguments against IFRS adoption – 10 problems with claims in favor
- 4/12/12 Time to call the game on IFRS adoption and go home?
- 7/12/12 Perhaps IFRS can be postponed to death
- 11/20/12 Convergence or Co-whatever-its-called-today with IFRS is Co-drifting-away
- 8/26/13 Maybe we can finally bury IFRS convergence
- 9/16/14 More good stuff for auditors – 9-16-13
- 8/1/14 We can finally bury IFRS convergadoption ™?
- 11/24/15 IFRS adoption: Yet another fatal flaw and a heaping dose of ridicule
- 12/5/14 More good stuff for auditors – 12/5
- 12/8/14 IFRS adoption likely to stay dead