Hans Hoogervorst Addresses AICPA/IFRS Foundation Conference

In a recent address at the American Institute of CPAs (AICPA) / IFRS Foundation conference, the IASB chairman, Hans Hoogervorst, discussed the importance of a single set of global accounting standards and the US SEC's impending decision on using IFRSs in the United States.

Mr Hoogervorst focused on the possible SEC decision on incorporation of IFRSs. He addressed the concerns of Americans and other nations that haven't formally committed to IFRSs yet:

A decade of joint work to improve and align IFRSs and US GAAP means that both sets of standards have improved and are moving closer together. Each is used within major capital markets. Each has its relative strengths and weaknesses. While I am not dismissing these differences, I am not convinced by the arguments that one set of standards is clearly superior to the other.

A more compelling criticism of IFRSs is that inconsistent application of the standards makes international comparison more difficult. . . . If you do not have a single language, international consistency in financial reporting will always remain an illusion. A major comfort to the United States should be that if you adopt IFRSs the SEC will remain in full control of enforcement.

[I]t would be reasonable that a relatively long transitional period is provided, particularly for smaller publicly traded companies. An option to allow early adoption of IFRSs also seems sensible for those companies that can already see substantial net benefits of IFRSs.