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IFRS Roadmap in Temporary Holding Pattern

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October 30, 2009

Whether or not the SEC commissioners move to adopt the proposed roadmap, or substantially change it, the message seems clear: the U.S. and international accounting standard-setters are going to aim for June 2011 as the “date certain” for convergence.

During a conference held this week in New York on IFRS by the AICPA and the IASC Foundation, the two chairmen of FASB and the IASB, Bob Herz and Sir David Tweedie, respectively, said their boards would meet monthly from now on to achieve convergence, or as close as possible to convergence as possible (see IASB and FASB to Meet Monthly on Standards Overhaul). The next day, SEC Chief Accountant Jim Kroeker said they should proceed with their ongoing convergence efforts and hinted that the SEC commissioners might make their decision by Dec. 21 (see Kroeker: Keep Converging With or Without Roadmap).

It’s hard to say exactly what the delay is in the roadmap, although the surprisingly low number of comments (a little over 200) received on it seems to be one factor. In addition, SEC chair Mary Schapiro and the other commissioners have been devoting much of their attention to the fallout from last fall’s financial crisis, and related concerns such as dark pools, flash trading orders, the Madoff Ponzi scheme, the financial regulatory overhaul, and the like.

A roadmap to convergence of accounting standards — a process that has been going on since 2002 at least — must seem like a matter that can be postponed for a while, especially when the proposed roadmap only says that the SEC won’t have to decide until 2011 on whether enough milestones have been met before proceeding further.

So we may or may not get a date certain from the SEC commissioners before the winter solstice. In the meantime, the standard-setters are going to be working through a lot of thorny issues because the general consensus seems to be that a single set of “high-quality” accounting standards is what the global economy demands, eventually anyway.

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