IASC runs out of time as Americans take over.
American accounting standards are set to force their way into international guidance as time runs out for the International Accounting Standards Committee.
US guidance on derivatives is set to replace the IASC’s own proposals as an emergency measure to complete a core set of international standards by April next year.
Next month, the IASC Board will consider adopting three US standards on Financial Instruments, including draft guidance on derivatives. The US standard would replace the IASC’s own proposals which were published in March.
The IASC now accepts there is insufficient time to flesh out its own proposals before the April 1998 deadline agreed with IOSCO, the International Organisation of Securities Commissions. If the plan gets the go-ahead, the US standards would be issued as an IASC Exposure Draft.
Sir Bryan Carsberg, IASC secretary-general, stressed that adopting the US standards was an interim measure. The IASC would continue to develop ‘comprehensive international standards (on financial instruments) as a matter of urgency’, he said. The IASC’s own original standards would have taken between one and three more years to develop.
Sir David Tweedie, Accounting Standards Board chairman, said: ‘The poor old IASC is in a difficult position. I am sympathetic, but I don’t know whether we would introduce the US standards into the UK. We don’t like taking secondhand standards without thorough discussion at the international level.’
Carsberg has no assurance the IASC Board will approve the plan. Nor is there any guarantee that the Securities and Exchange Commission, IOSCO’s most powerful member, will accept the US standards within the core international set.
However, two weeks ago Carsberg visited the US where he told the SEC and the Financial Accounting Standards Board of the proposal. ‘Obviously I was listening to see whether any great shock or horror manifested itself,’ he said. ‘I think it’s fair to say that none did.’
See feature in next week’s issue.