Regulators over there are now full throttle to adopt them and Christopher Cox, chairman of the Securities and Exchange Commission, has mad it point to have IFRS in place before in 2011.
This week we learn that an announcement to allow US companies the option to use only IFRS is imminent. That is another significant step forward. In fact, it takes us just one step away from the introduction of a compulsory use of the standards and replacing US GAAP and its 2,000 plus pages.
This may seem like a cautious approach given the way international standards were approached in Europe, but it has to be a sensible one. There is always a backlash to change and if the change comes from outside, the US can be particularly vociferous in its opposition. The stories of IASB chairman Sir David Tweedie being threatened by politicians and corporate leaders are legion.
An ‘option’ gives the opportunity for the market to make the decision. Investors, institutions, even the press, might compel companies into using standards that are much easier to compare. Of course, it’s a risk. It might not happen. But equally stakeholders might have seen the writing on the wall and will force a decision on company boards. Quite right too.
What they might be worried about is whether a change in the constitution of the IASB’s parent body, the IASC, will give away more powers to influence the work programme of the board. That could be dangerous and could provide the means for spooking potential US users if they feel influence lies in a place it shouldn’t be.
So while the push to bring the US on board is moving along nicely, those with the influence will have to take care.
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