PracticeAuditIASB should wise up

IASB should wise up

The IASB’s decision on segmental reporting, which was to adopt the US standard pretty much hook, line and sinker, was a step too far in the convergence debate

There is little point in discussing the details of the arguments, except to
say that suggestions that there should be country-by-country reporting, rather
than the slightly meaningless management method, have a great deal of merit.

The point, really, is to emphasise European distaste – disgust might be
putting it a little too strongly – for US accounting standards. It isn’t some
sort of narrow xenophobic point about disliking the US pushing others around in
the world.

It is grounded, more than anything else, in a belief that the US is not
necessarily the source of all knowledge on accounting matters. Without making
too much of a point about Enron, you could just say that it seems a bit strange,
in that context, to have the US impose its standards elsewhere.

Money talks, of course, and if only the IASB felt like delaying, most of the
money might be over here in due course, if present trends continue and everyone
decides to list here rather than in the States.

David Tweedie has reacted to criticisms of the segmental reporting standard
by going on the warpath and directly addressed the European Parliament on the
issue.

‘I am here today to state that the IASB is not seeking convergence at any
price nor will the IASB adopt US GAAP blindly,’ Tweedie said.

That’s not exactly what it looks like, and if Tweedie and the IASB want to
make the convergence project work, they will have to make it look more like the
two sides are converging, and less like the wholesale surrender it appears to be
at present.

Penny Sukhraj is a reporter on Accountancy Age

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