Its core standards have been endorsed by IOSCO, the international organisation of securities regulators. At its annual meeting in Sydney, IOSCO resolved that it recommends its members to permit incoming multinational issuers to use the IASC standards for cross-border offerings and listings. The core standards are all of IASC’s standards except for a few that have specialised application.
What does the endorsement decision mean for the future? All of IOSCO’s major members, except the US and Canada, already accept use of IASC’s standards in cross-border listings without any conditions. This is not expected to change.
The IOSCO decision does not directly affect the position in the national jurisdictions of its members. Action by the SEC is needed before IASC’s standards can be given higher recognition in the US.
The SEC published a concept release about use of international standards in February, and when the comments have been analysed, we shall learn more about the way forward.
In the meantime, we can draw certain encouraging inferences. We know the SEC supported the IOSCO resolution. The resolution refers to the possibility that some administrations will require ‘reconciliation of certain items’.
This seems to offer the prospect of a major step forward from the present position, in which a virtually complete reconciliation is required.
However, the IASC Board has proposed a restructuring of IASC that is the key to future prospects. It will achieve the highest levels of independence in decision-making and create the possibility of an effective partnership with national standard setters to work on elimination remaining differences between national and international standards.
The final stage is a vote of members that took place on 24 May. If the decision on endorsement by IOSCO is followed by final approval of the restructuring by members, we shall be securely on the path to global accounting standards.
– Sir Bryan Carsberg is secretary general of the International Accounting Standards Committee.
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