My first session: Towards a Single Set of Global Accounting Standards

Hitting some sessions now.

This one in the foot ball field sized Manchester ballroom, complete with double 20′ screens is first up for me.

“My first session : Towards a Single Set of Global Accounting Standards”

The point here is that raising capital will work better when accounting standards are harmonized globally. The States, being the single largest capital market, is somewhat resistant to jumping right in and adopting the IFRS. Europe apparently got organized and adopted these standards in 2005. US must change, however, to continue to take advantage of increasingly harmonized global capital markets

Bob Herz, Chairman of FASB, thinks this is the way the US must go, and it “makes sense”. While the US reporting standards are the best in the world (nevermind the credit crisis that is partly a result of lack of transparency, and allowance of overly exotic and opaque, unpricable debt instruments, etc.) US accounting rules (US GAAP) are certainly the most complex. Which of course keeps the legions of lawyers gainfully employed.

Well the game plan for adoption will likely first entail a plan to “improve and adopt” the IFRS standards: “Focus on major areas, work together, and move the rest of the way towards IFRS over the next five years”, said Bob. It will involve a national effort, what with the prevalence of GAAP references in tax law, accounting education, banking regulations.

Bob says, “Reporting is not just compliance, not an opportunity to spin, just an honest form of communication. You don’t just have to do the minimum despite what the lawyers say. Disclosure is just too important to be left to lawyers”.

Hallelujah! to that sentiment, I say. It seems the restrictions we often run into in trying to make websites investor friendly stem from way overly cautious legal departments. Perhaps moving towards IFRS will help these impediments to transparency.

What’s the next session!