The Financial Times reports that the International Accounting Standards Board is no longer willing to pursue convergence with its US peer as “an objective in itself”, its oversight body said on Monday. This is the latest sign of eroding consensus on accounting rules.
The International Accounting Standards Board would no longer pursue convergence with its US peer as “an objective in itself”, its oversight body said on Monday, in the latest sign of eroding consensus on accounting rules.
The IASB, which sets standards for most of the world outside the US, was nominated by the group of 20 nations to oversee the development of a single high-quality accounting standard by mid-2011.
This was widely assumed to include convergence of US and international standards with a view to US adoption of International Financial Reporting Standards, which are already used or due to be used by more than 110 countries, including India, China and Japan. However, increasing politicisation of the accounting process and tensions over sovereignty has made this harder to achieve, say regulators and accountants.
In a reviewof its constitution published on Monday, the IASB’s oversight board addressed this concern over the convergence project and said it would “emphasise that convergence is a strategy aimed at promoting and facilitating the adoption of IFRS, but it is not an objective by itself”.
Atsushi Saito, Chief Executive of the Tokyo Stock Exchange, told the Financial Times that Japanese companies did not want IFRS, which is principles-based, to draw any closer to US standards, which are rules-based.
© Financial Times
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