The uncertain state of U.S. adoption of International Financial Reporting Standards could be helping a number of companies by giving them extra time to make the adjustment.
That was one of the points raised during a discussion of global accounting standards on Tuesday hosted by Pace Universitys Lubin School of Business in New York. The Securities and Exchange Commission recently ruled that IFRS wont be incorporated into U.S. financial standards until 2015 at the earliest, depending on a decision next year on whether to go forward with the transition.
We know we have time between now and when the SEC mandates it, said IBM director of IFRS policy and implementation Aaron Anderson. We can do a brisk walk instead of a sprint.
John McGinniss, executive vice president and chief accounting officer at HSBC North America Holdings, said the delay could benefit smaller community banks.
Several of the speakers disputed the notion that IFRS is more principles based than U.S. GAAP. U.S. GAAP is founded upon principles, said SEC Chief Accountant James L. Kroeker. Thats what the P is supposed to stand for. However, he noted that principles-based regulations dont work if the people behind them arent principled.
Tom Jones, director of Lubins Center for the Study of International Accounting Standards, believes that adoption of IFRS is inevitable, and he sees limitations in the convergence process of U.S. GAAP with IFRS. You cant converge 17,000 pages with 2,000 pages, he said. You have to adopt at some point.
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