The drive to converge accounting standards globally seems to be hitting some unexpected snags, not only in the U.S., but other parts of the world.
A story that ran on Reuters the other day described some of those challenges, among them the political pressures that accounting standard-setters have been facing in Europe and the U.S. to relax fair value measurement standards. While FASB may be pushing back in the other direction and mulling the use of fair value and mark-to-market with bank loans in addition to assets like mortgage-backed securities, the IASB seems to be tacking in an alternative direction. That could be leading them on the road to divergence, not convergence.
The upcoming G20 summit next month could be a crucial chance to get the convergence effort back on track, especially for the U.S., but it could also lead to further pressures as politicians seek to exert more influence on accounting standards to deal with the financial crisis and steer their local economies toward recovery.
International standards are coming face-to-face with political realities, and its not a pretty sight.