The Securities and Exchange Commission’s roadmap for the convergence of accounting standards could suffer due to a lack of detail, as well as potential detractors looking to pounce on any problems from the European experience.
Last month, the US financial regulator and the European Commission agreed on what was hailed as a significant step towards the convergence of US GAAP with international financial reporting standards.
It aims to allow IFRS users to file accounts with the SEC without reconciliation by 2009.
But the agreed roadmap has already come under criticism for a lack of specifics. A source within the International Accounting Standards Board, which has the task of developing converged standards with its US counterpart, said the roadmap ‘showed all the motorways but none of the exits’.
He added that all parties need to sit down and discuss how the roadmap fits in with the current convergence plan that the IASB and FASB are following.
There are also worries that enthusiasm for the roadmap is tempered on the other side of the Atlantic, and any problems that the introduction of IFRS in Europe throws up could be capitalised on.
‘The SEC is still expressing caution on IFRS implementation and enforcement,’ said Dr Nigel Sleigh-Johnson, head of financial reporting at the ICAEW. ‘The doubters in the US will try and hold things back if Europe slips up.’
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