Comments on: IFRS: Incomparable Flexible Reporting Standards. http://alephblog.com/2008/10/11/ifrs-incomparable-flexible-reporting-standards/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Fri, 25 May 2012 21:31:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David Merkelhttp://alephblog.com/2008/10/11/ifrs-incomparable-flexible-reporting-standards/comment-page-1/#comment-19988 David Merkel Fri, 14 Nov 2008 18:44:51 +0000 http://alephblog.com/?p=1024#comment-19988 Darla -- you have me on fair value; as I have written elsewhere, fair value is not a major cause of the credit crisis, though many auditors misapply SFAS 157. But the benefits of standardizing accounting across borders are overstated. Perhaps the train cannot be stopped; perhaps it can. As we are finding now, many things that people relied upon are failing... there is no telling what a new administration might do. Chris Cox went for IFRS out of weakness and pressure from Wall Street. The new SEC chair will represent an administration with a more internationalist point of view, but who can tell? Skepticism over accounting rules may lead to some surprises. I suspect we end up with IFRS, but after more negotiations that brings some aspects closer to GAAP. Darla — you have me on fair value; as I have written elsewhere, fair value is not a major cause of the credit crisis, though many auditors misapply SFAS 157.

But the benefits of standardizing accounting across borders are overstated. Perhaps the train cannot be stopped; perhaps it can. As we are finding now, many things that people relied upon are failing… there is no telling what a new administration might do. Chris Cox went for IFRS out of weakness and pressure from Wall Street. The new SEC chair will represent an administration with a more internationalist point of view, but who can tell? Skepticism over accounting rules may lead to some surprises.

I suspect we end up with IFRS, but after more negotiations that brings some aspects closer to GAAP.

]]> By: Darla Sycamorehttp://alephblog.com/2008/10/11/ifrs-incomparable-flexible-reporting-standards/comment-page-1/#comment-19987 Darla Sycamore Fri, 14 Nov 2008 18:31:23 +0000 http://alephblog.com/?p=1024#comment-19987 You make some valid points. Yes the adoption of IFRS has been a hodge podge and there is yet no comparability.The details in US GAAP I believe lead to a rule book mentality.US GAAP did not prevent Enron or the credit crisis. If anything a lot of effort goes into designing transactions to satisfy detail accounting rules - in my view it is the substance of a transaction that counts not its form.Unfortunately one cannot legislate ethics. The credit crisis has pointed to the need for international solutions.The IASB has shown itself to be a leader in the fair value debate. I see signs in the US of yielding to government pressure. This has been a characteristic in the USA - witness Sarbanes Oxley. Dropping fair value measurements as a quick fix does not work for me. I respectfully suggest as a Canadian, born in the UK, that the USA needs to be part of the international community - isolationism does not work. The US should join in and make IFRS work. In any event the FASB and the IASB are working toward convergence. You cannot stop the train. You make some valid points. Yes the adoption of IFRS has been a hodge podge and there is yet no comparability.The details in US GAAP I believe lead to a rule book mentality.US GAAP did not prevent Enron or the credit crisis. If anything a lot of effort goes into designing transactions to satisfy detail accounting rules – in my view it is the substance of a transaction that counts not its form.Unfortunately one cannot legislate ethics.
The credit crisis has pointed to the need for international solutions.The IASB has shown itself to be a leader in the fair value debate. I see signs in the US of yielding to government pressure. This has been a characteristic in the USA – witness Sarbanes Oxley. Dropping fair value measurements as a quick fix does not work for me.
I respectfully suggest as a Canadian, born in the UK, that the USA needs to be part of the international community – isolationism does not work.
The US should join in and make IFRS work. In any event the FASB and the IASB are working toward convergence. You cannot stop the train.

]]> By: Brian Powershttp://alephblog.com/2008/10/11/ifrs-incomparable-flexible-reporting-standards/comment-page-1/#comment-19342 Brian Powers Sun, 12 Oct 2008 14:48:29 +0000 http://alephblog.com/?p=1024#comment-19342 At last check, the CFA Institute supported the move to IFRS. As you carry the CFA designation, I am curious if you have any comment on the CFAI's opinion? Disclosure: I am currently a candidate for the CFA designation. At last check, the CFA Institute supported the move to IFRS. As you carry the CFA designation, I am curious if you have any comment on the CFAI’s opinion?

Disclosure: I am currently a candidate for the CFA designation.

]]>