| Catch the Wave of Convergence
By Mark K. Nelson, Cherry, Bekaert & Holland, L.L.P. (CB&H)
Email: mnelson@cbh.com
 Since our last publication of the Mid-Market Monitor, the world’s governing accounting standards boards have been swiftly moving to the convergence of the multiple global accounting standards into one global standard.
On August 27, 2008, the Securities and Exchange Commission (SEC) published its “Road Map to IFRS (International Financial Reporting Standards)”. The SEC’s map is a proposal of how to get America’s public reporting companies transitioned to IFRS by 2014 for large accelerated filers, 2015 for accelerated filers, and 2016 for small reporting companies and other public filers. The SEC is seeking comments from the public and will most likely vote on the matter in 2011. The road map also allows over 100 companies to adopt IFRS as soon as 2009.
As detailed in our last issue, the International Accounting Standards Board (IASB), the body responsible for setting global standards, has been working in tandem with the U.S. standard setting body, the Financial Accounting Standards Board (FASB) for the last several years. Following the publication of the SEC’s road map, FASB and IASB updated their joint “Memorandum of Understanding” (MOU) in September 2008 to include a progress report and a timetable for completing the convergence.
The MOU outlines the intent of the FASB and the IASB to converge numerous points of differences from 2009 through 2011. Some of the topics noted in the MOU are financial statement presentation, leases, liability versus equity distinctions, and revenue recognition, among others.
As the wave of convergence continues, public and private businesses need to prepare now to ensure that they do not get swept away when the time comes to implement the new international accounting standards. Business owners can continue to monitor the ongoing convergence project at www.ifrs.com.
Mark is an Audit Partner with CB&H and a member of the Firm’s Private Business Group. |
