Roadmap imminent as Cox mounts charge towards IFRS

Christopher Cox, SEC chairman

The US is to take a giant leap towards international accounting standards, publishing its long-awaited roadmap either today or tomorrow.

Despite fears that it could be derailed by the credit crisis and a barrage of criticism for fair value, a key IFRS principle, the roadmap to International Financial Reporting Standards is to be published this week in what appears to be an attempt to force the issue before a new president transforms the political climate.

The Securities and Exchange Commission will publish the roadmap and confirm the US’s intention to switch to international standards. It is understood chairman Christopher Cox is working to put all plans in place for a switch before a new president appoints his own man to run the SEC.

The roadmap will be viewed as a major boost to the International Accounting Standards Board and its effort to ‘converge’ IFRS with US standards. It will also strengthen its position in the face of growing opposition in Europe, where there has been much criticism of the board over its stance on fair value, especially from the French.

Ken Wild, an IFRS expert at Deloitte, said the roadmap showed ‘the SEC is still committed.’

'The big issue is transparency and the question is whether we do that country-by-country or globally. It must make sense to get a global change in place and there’s nobody out there better placed than the IASB to deliver global standards,’ he said.

Ian Mackintosh, chairman of the UK Accounting Standards Board, said: ‘This will take out some of the uncertainty and demonstrates that they are heading for convergence. It signals the US is serious about IFRS.’

In October Bob Herz, head of US standard setter FASB, warned that IFRS could be delayed by the crisis, suggesting it may be for the next presidential administration to resolve. But he signalled support of IFRS, bluntly stating that the global crisis required ‘global solutions’.

The IASB is co-ordinating with FASB on reviewing the role of accounting standards in the credit crisis.

Chairman Sir David Tweedie is also due to appear before the commons Treasury committee to answer questions on fair value next week. The IASB has offered a relaxation of fair value by allowing the reclassification of securities.

The French argued unsuccessfully for a broader ‘carve out’ allowing all asset classes to be reclassified.

An SEC spokesman confirmed the roadmap could emerge this week.