PracticeAuditUS threat to IASB deadline

US threat to IASB deadline

The International Accounting Standards Board could see its plans to finalise international standards in time for Europe's 2005 deadline scuppered by its own drive towards convergence with the US, senior figures have warned.

Link: IAS special report

With the deadline for all listed companies within the EU to adopt international financial reporting standards fast approaching, time is running out for the IASB to produce the required standards in time.

With its limited resources, some feel it would be better served to spend its time concentrating on this key issue rather than devoting energy to bringing international accounting closer to US rules.

‘The IASB should first focus on getting the standards for 2005 out and devote all its resources to it,’ said Mark Vaessen, head of KPMG’s IAS advisory services group.

‘Nobody disputes convergence is also an important issue, only the timing of it. If completing the standards in time means slowing down on convergence, that’s what needs to be done.’

There is also much doubt in the industry over the commitment from the US Financial Accounting Standards Board to make several concessions with the IASB when it comes to the issue of convergence. Many see the US board as wanting to keep converged standards as close to the original US rules as possible.

‘Given that convergence could be a long drawn-out process and might not offer the best solution, it would be best for the IASB to devote its energies to the more important area of Europe, where more companies will actually be using the standards,’ said an industry insider.

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