Financial Reporting Standards Advocacy

 

Promoting One Set of High-Quality Global Financial Reporting Standards

 

The CFA Institute Centre and its Corporate Disclosure Policy Council (CDPC) advocate for the development of one set of high-quality global financial reporting standards to meet the needs of investors and creditors.

 

The CDPC and its predecessor committees (the Financial Accounting Policy Committee and the Global Financial Reporting Policy Committee) have responded to the International Accounting Standards Board’s (IASB) proposed accounting and financial reporting standards and other discussion documents.

 

Our key areas of interest include: 

• The convergence of International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Practices (U.S. GAAP)
• The international convergence to IFRS
• Regulators' support of the convergence to IFRS

 

In Detail:

 

Convergence of International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Practices (U.S. GAAP)

• In February 2006, the IASB and Financial Accounting Standards Board (FASB) issued a Memorandum of Understanding outlining the steps towards converging IFRS and U.S. GAAP
• The CDPC has participated in projects to related to IFRS and U.S. GAAP convergence, including: 
  • Developing the Comprehensive Business Reporting Model as a template for high quality standards of  presentation of financial statements
  • Providing comment on creating a conceptual framework that would provide a solid foundation for future accounting standards

    

International Convergence to IFRS

• IASB works with national standard setters to converge accounting standards globally
• IASB discusses convergence with Japan’s Accounting Standards Board
• Australia Accounting Standards Board made the Australian Standards equivalent to IASB Standards in July 2004
• Hong Kong Financial Reporting Standards have been modeled on IFRS since 2005
  
• Canada’s Accounting Standards Board (AcSB) ratified a new strategic plan in January 2006, for the direction of accounting standards that will significantly affect the way financial reporting will be carried out in Canada in the future
  
  

Regulators' Support of Convergence to IFRS

• European Commission endorsed and adopted IFRS as part of the Internal Market Directive
• U.S. SEC developed a roadmap to allow the use of IFRS for filing financial statements
  
  • SEC's proposal to eliminate the reconciliation (PDF) to U.S. GAAP for financial statements prepared using IFRS as issued by the IASB
  • SEC's concept release (PDF) on allowing U.S. issuers to prepare financial statements in accordance with IFRS