First the good news. A communique from the recent G20 Summit called on accounting standard-setters - the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) - to work urgently on a single set of high-quality global accounting standards. If it results in a level playing field based on principles, then it will be beneficial not just for accountants, but the wider business community.
But at about the same time that this was happening, FASB was unilaterally shifting away from the application of fair value for the many securities that now have no ready market, which will enable banks to present a brighter picture.
It wasn't of course a big shift but it seems to be significant, and was in response to direct Congressional pressure on FASB 'to do something or else'. But it has already been branded 'accounting jiggery pokery' by the Financial Times in its Lex column.
That shift has now been seized on as a political lever by Europe's Economic and Financial Affairs Council (ECOFIN), which has called for immediate action by IASB - which would rather have a six month review to avoid tinkering - to level the playing field. This might be convergence - but should it also be a race to the bottom, with an attendant loss of confidence in published accounts?
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