IFRS – hands across the sea

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Bill Sheridan of CPA Success tells me that US CPA’s are looking forward to the introduction of IFRS. That’s interesting when I hear all the shenanigans around fair value. Even so, his recent post on the topic is interesting:

Actually, a discussion via his blog post titled What I Meant in Accounting Education under IFRS covers some very good ideas about what changes need to happen when we begin teaching IFRS in schools (and, I believe, in CPE / professional development as well). The discussion comes from a visit by SEC Deputy Chief Accountant Julie Erhardt to a graduate class of Professor Dennis Beresford (former chairman of the FASB).

Julie recommends that the approach to financial accounting needs to change to a focus on the business issues first. She goes on to say, “Only after the economic issues and the basic principles are covered would some of the details (e.g., what to do with contingent rentals) that distinguish IFRS from GAAP be mentioned. In this approach, about 50 percent of the effort would be on the economics, 25 percent would be on the principles (that ought be to pretty similar), and 25 percent on the rules (that could be different).”

British CAs who have been immersed in IFRS for years have plenty to offer. Why not use the technology that we have at our fingertips to put out a helping hand to our American cousins? Given they’re coming from a rules driven system and all that means, they’re going to need it. For instance, while the points about economics are technically correct, moving to a different mindset is an altogether different challenge.

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Tagged as: Accounting, Financial Accounting Standards Board, Generally Accepted Accounting Principles, International Financial Reporting Standards