Contabilidade internacional 02

FT REPORT - INTERNATIONAL ACCOUNTANCY
Fast adoption raises hopes of happy families.
By JENNIFER HUGHES
Financial Times - 10/09/2007
Surveys IAC1
Page 2

Who would have thought it? Just two years ago international financial reporting standards were introduced in Europe. Now the list of countries adopting the standards set out by the International Accounting Standards Board (IASB) is growing at an ever-quicker pace.

Japan, Canada, South Korea and India are committed to moving towards IFRS, joining a list that is now more than 100 members long.

Even the US, by far the largest capital market, is moving towards reconciling IFRS accounts with US GAAP.

"What has taken off faster than any of us realised is the way IFRS has gone round the world - the pace of this is staggering," says Ken Wild, global leader of IFRS at Deloitte. "The US is saying it will accept these accounts and this is a major step forward and a huge credit to the success the IASB has achieved."

Mary Tokar, head of IFRS at KPMG, puts the tipping point for IFRS adoption as some time after 2005. "If adoption in 2005 had created turmoil and disturbance, then the European financial community would have dealt with it and moved forward, but IFRS probably would have become a European standard. IFRS reached a tipping point once it became clear that 2005 adoption had gone well," she says

Ms Tokar says the network's firms have taken to dividing IFRS countries roughly into "Wave One" and "Wave Two" for ease of communication. "Wave One are the anchors - the EU, South Africa and Australia. Wave Two are on their way and they're fuelling the current momentum," she says.

"What has become indisputable is that we've moved past the argument about whether IFRS is the right system or not, it's now all about what should be in the standards," she adds. "Wherever you go in global financial markets and you come across a local accounting system, you now ask how this is different to IFRS because this system has become the global standard."

With the standards seemingly firmly established, much attention is focusing on the US with speculation as to whether, after completing reconciliation, the US Securities and Exchange Commission (SEC) will then turn its attention towards allowing US companies to adopt IFRS.

"If the SEC is going to allow foreign private issuers not to reconcile, it would seem an entirely logical step, if you're going to create a level playing field, to allow US companies to use IFRS," says Will Rainey, global head of IFRS at Ernst & Young. "US companies have been looking at the opportunity given by IFRS to have just one language with all the cost savings and efficiencies that could involve."

Tom Jones, vice-chairman of the IASB, says interest in his availability for speeches and debates in the US has stepped up noticeably in recent months.

"The disadvantage overseas companies face in keeping two sets of books today - one IFRS and one US GAAP - will become a disadvantage for US companies operating elsewhere," he says. "There's an enormous cost to companies of keeping different accounting systems in different countries and not only that, but there is also the risk of more errors and confusion."

In addition to the growing global use of IFRS, which is beginning to isolate the US system, US companies' interest seems to be a combination of more local factors, including dissatisfaction with the immensely complex US accounting rules and lingering doubts in the system's quality - post-Enron - which were not helped by the more recent share options backdating scandal.

But a US move to IFRS is not without its own problems.

Since the Norwalk Agreement in 2002, the IASB and its US counterpart, the Financial Accounting Standards Board (FASB), have been working together on making the two sets of accounts compatible and to co-ordinate work on new standards in the future.

This collaboration is bearing fruit, in the form of standards such as IFRS 8 for the reporting of business segments, which is heavily based on the existing US standard. But this one example has met with a storm of protest in Europe and among the many criticisms is a perennial favourite: the fear that the IASB is unduly influenced by FASB and that the IFRS-using world will end up converging nearer America than the other way round.

"I think the IASB hasn't really created general consensus among stakeholders on the convergence process," says Nicholas Veron, research fellow at the Bruegel Institute. "The Norwalk Agreement was quite consensual, but what has been less solid was the 2006 agreement, which set a very demanding timetable for convergence projects. This has dominated the IASB's agenda since then but has been subject to very little consultation."

The IASB is moving to include a broader range of input from those outside the standard-setting community and says it is actively encouraging more participation in its consultations, particularly from the users of statements. Recently, it appointed Stephen Cooper, analyst at UBS and a member of the corporate reporting users forum, as a part-time board member.

There is certainly a growing sense of momentum behind the adoption of IFRS around the world, but as the ever-heated US debate shows, it is not yet a done deal.