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01 Sep 2010
The head of the international accounting rule maker said he has little sympathy for complaints on the surge of draft accounting standards being rolled out to meet the June 2011 convergence deadline.
Sir David Tweedie, chairman of the International Accounting Standards Board (IASB) said respondents have had ample notice of the new accounting drafts which need to be released if the US hopes to converge key accounting standards with its US counterparts.
“Let’s look at what we’ve got out there at the moment – leases, revenue recognition and insurance. If you’re not an insurance company you’ve got two. Big deal,” he said.
“I’m not terribly sympathetic. It’s not as thought these have sprung out of no where, we’ve been working on these, they’ve seen the drafts coming, they know what we’re doing.
The US Securities and Exchanges Commission (SEC) is deciding whether to ditch its current accounting code for listed companies and adopt international accounting rules, in line with other major economies across the world.
One crucial factor will be whether US and International accounting codes are substantially converged by June 2011. The IASB has already had to revise its convergence timetable once, to address concerns it was releasing too much, too soon.
In June, the boards wrote to the G20 seeking approval for the lighter agenda, in response to the concerns the IASB was overloading accountants and businesses with draft accounting rules.
However, even the new lighter agenda has attracted criticism for being too ambitious. Sir David rejected the criticism.
“It’s tough, but goodness it’s tough for us too. We can’t keep getting all this advice. We always get conflicting advice. ‘You must have these done by June 2011, but don’t give them to us all at once’,” he said.
For full details of Sir David’s interview, see Accountancy Age's 9 September issue.
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It's not the quantity, it's the complexity
Finance officers and accountants the world over are experienced and flexible in adopting new standards. Most readily see the sense in adoption where sense prevails. I wonder if the quest for sense is holding up implementation: revenue recognition in particular has moved from the economic reality of where revenue recognition can be justified by the collectivity of an amount ("incoming resource" - see what I mean?) spread over the period of supply / service into arbitrary assessment of customer relationship lives. Lots of work to provide not necessarily an objectively satisfying answer in the face often of inexperienced audit pedantry with insistence on firm-specific rules occasionally divorced from soundness of principle. Tetchiness will not solve the problem!
Posted by: david kinnon, 01 Sep 2010 | 00:00