FRC Says FASB/IASB Convergence is a Complete 'Failure'
The Financial Reporting Council has stated that IASB's unsuccessful attempts with regard to its program of convergence with the FASB is a 'failure'. Addressing the participants at the Financial Reporting Outlook conference organized by Ernst& Young and held at Westminister, Stephen Haddrill of FRC clarified that even after putting efforts consistently for ten years, one specific set of accounting principles/standards have not been achieved.
For almost ten years now, the International Accounting Standards Board has been upholding a specialized arrangement with the Financial Accounting Standards Board hoping that as the regulatory body of the biggest capital market, FASB will be streamlining its principles/standards as well as co-ordinate with it to help listed entities and MNCs apply IFRSs finally.
Even though the United States managed to jump through some of the significant hoops, like permitting listed entities to adopt IFRS, complete convergence is yet to be achieved. It must be noted that complete convergence will focus on enhancing both United States Generally Accepted Accounting Principles and International Financial Reporting Standards with an intention to eliminate any differences that exist between the two accounting standards.
Haddrill also reinstated that FRC does not want to engage United States irrespective of the fact that it is the biggest capital market. He shared that less influence of U.S. would in fact be a good idea. On the other hand, even Ruth Picker, Ernst& Young's Global Leader for IFRS services mentioned that many entities in Europe are tired and irritated of the convergence related program, especially now that the United States is distancing itself. She also pointed out that a number of entities from across the world are also of the opinion that it is better that the convergence program is over. Globally, organizations are in favor of working together with the Financial Accounting Standards Board rather than rely on a arrangement done on a bilateral basis.
The FRC is United Kingdom's independent regulatory body that is holds a number of responsibility in terms of promoting premium quality reporting and corporate governance for fostering investment. The body is also responsible for setting standards for actuarial practice and corporate governance.