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ICAEW: US standards proposal complicates convergence
Institute takes a pop at the US standards setter's proposal for fair value accounting
Written by Kevin Reed
Accountancy Age, 28 Sep 2010
A proposal by the US accounting standards setter to use fair value for all assets will increases complexity and complicate the strategy to converge with international rules, claims the ICAEW.
Dr Nigel Sleigh-Johnson, head of the ICAEW’s Financial Reporting Faculty, said that FASB's strict model for measuring financial instruments will make statements harder to read and information more difficult to understand for investors.
"Simplification of the standards for financial instruments accounting is a key priority, and is an objective endorsed by the G20 governments. The FASB’s proposals are surely pulling in the wrong direction," said Sleigh-Johnson.
The IASB's model contains 'mixed measurement': which results in financial instruments being stated at either amortised cost or fair value in the primary financial statements (with fair values for all financial instruments disclosed in the notes).
The ICAEW has been the most vocal accounting institute on the convergence debate. In February the ICAEW said the US Securities and Exchange Commission had failed to provide certainty on US plans to adopt international standards.
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Read more: http://www.accountancyage.com/accountancyage/news/2270588/icaew-standards-proposal#ixzz10wROIi5q
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