Will Rogers once quipped that if we truly wanted to slow down the aging process, all we had to do was allow it to be worked through Congress.Few would argue that one of the most effective ways to brake any effort or movement is to allow the government to get involved - on any level. I, for example, am currently on my fourth visit to my local town hall in order to obtain a building permit for a 400-square foot addition. Yes, you read it right - 400 square feet.
My personal experiences notwithstanding, I never fail to chuckle when our publication receives letters supporting the idea of government audits. The concept of the government assuming the responsibility for conducting audits is an issue that would consume far more space than I'm generally afforded here.
But I digress.
I also got a quasi-Will Rogers slowdown feeling several years ago at a video press conference in which the Financial Accounting Standards Board and its overseas counterpart, the International Accounting Standards Board, officially broached the subject of convergence - developing a single set of global accounting standards.
I realize that neither body is government-run, but in truth, neither has never been confused with a Tasmanian devil with regard to speed-driven pronouncements. One only has to look at FASB's glacial pace with stock options as validation for that critique, so at least they share that trait with lawmakers.
But I'm happy to report that recently, progress has replaced promises and press conferences. Last month, FASB and the IASB published the first draft chapters of a document laying out their views for an enhanced conceptual framework. The works, which are currently out for public comment, define the objective of financial reporting and qualitative characteristics of what they termed "decision-useful" financial information. The resulting collaboration stems from a joint project whose mission statement was "to build upon, improve and achieve the convergence of their existing conceptual frameworks."
The chapters are the first published work to be released out of a program that was announced back in February. Both FASB and the IASB want to update their respective frameworks, and, as a means to an end, spearhead the development of global financial reporting standards. The preliminary views document, the result of Phase A of the boards' conceptual framework project, eradicates some critical differences in the foundations of the accounting principles and standards set forth by the respective boards.
I won't bore you with shopworn clichés about globalization, or attempt to unnecessarily explain the inherent advantages of developing one set of accounting standards in lieu of having to use GAAP, IFRS, et al., if you do business in international markets.
But to be sure, it's an important first step toward a process that makes no pretenses about its degree of difficulty or the time necessary for a final implementation.
FASB and the IASB are soliciting comments on the document through Nov. 3, 2006. An exposure draft of these chapters is expected to be published in 2007.
Let's hope progress continues. We would hate to see the effort morph into accounting's version of The Will Rogers Follies.
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