Fitch Ratings predicts that 2009 will be a pivotal year for accounting, particularly in terms of fair value measurement and standards convergence.
The credit-ratings service has published a
The business combination standard may also add volatility to an acquirer's income statement as U.S. generally accepted accounting principles converge with International Financial Reporting Standards. Fitch also expects new accounting rules on special purpose entities to bring many off-balance-sheet entities back onto U.S. companies' balance sheets.
"Outside the U.S., new segment reporting under IFRS will need to be explained well if analysts are to understand the financial performance of a company given everything else that is happening," said Fitch managing director Bridget Gandy. A positive development for analysts and investors is that disclosures are set to improve on multiple fronts. Fitch expects disclosures on credit derivatives, fair value and off-balance-sheet entities to become more meaningful, particularly in the U.S.