Roadmap imminent as Cox mounts charge towards IFRS

Christopher Cox, SEC chairman

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

The Securities and Exchange
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
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.

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Fiona Westwood of Smith and Williamson.