Financial Reporting Issues Crowd Agenda
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To say that vital financial reporting issues are clamoring for attention is a major understatement. Not only are huge accounting convergence projects underway with the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), but controversies surrounding such issues as bank window dressing and underfunding of public pension are also hitting the business pages.
So there’s never been a better time to attend NYSSA’s 17th Annual Financial Reporting Conference. Speakers such as SEC Chief Accountant James Kroeker, IASB Chairman Sir David Tweedie, and FASB Member Marc Siegel will shed some light on these and other important financial reporting issues.
The twin elephants in the living room are clearly the progress of accounting convergence efforts and whether the US will go ahead and adopt international financial reporting standards, or not. Several savvy observers are betting against adoption of IFRS in the US, including CFO Magazine columnist Bruce Pounder (Why The SEC Won’t Flip the IFRS Switch), who believes it’s an extremely unlikely outcome. Instead, he believes the major convergence projects currently under way will eventually produce standards that are at least fairly similar.
Others, such as David Mosso, former vice president of FASB and author of Early Warning and Quick Response: Accounting in the 21st Century, and Tom Selling, a former accounting professor and author of the Accounting Onion blog, are highly skeptical of both IFRS and GAAP and of the convergence process. Selling reports in his blog that Mosso described IFRS/GAAP convergence efforts as a collision between two garbage trucks. Mosso explicitly states in his book that GAAP is “broken.” Selling labels efforts in the US to convert to IFRS from GAAP as “the Big Four’s IFRS putsch.”
Meanwhile, convergence efforts are moving along, although it seems highly unlikely that the FASB and IASB will meet the G-20s deadline of mid-2011 for full convergence. Indeed, the IASB and FASB announced a revised timeline for the convergence project. This timeline includes projects related to the financial crisis, such as: consolidation, fair value measurement guidance, derecognition disclosures, financial instruments, leases, and revenue recognition. Other projects include liabilities, insurance contracts, and a number of issues related to the conceptual framework.
Many of these issues present huge, thorny problems trying to reconcile GAAP and IFRS and create some middle ground acceptable to all the parties involved, which makes it even less likely that the project will come in on schedule. Financial reporting issues remain hugely important and the slow pace of progress on many of these issues is frustrating for business leaders, analysts, and shareholders alike.
–Amy E. Buttell was a journalist working in Erie, Pennsylvania and is a graduate of Mercyhurst College with a certificate in accounting.