According to a newly revised Financial Accounting Standards Board agenda, the move from U.S. Generally Acceptable Accounting Principles to International Financial Reporting Standards is certainly in the works, and it may happen as soon as three years from now.
According to CFO.com coverage of a Webcast hosted by the FASB earlier this week, the board is working to pare down the number of projects on its plate and then speed up those that remain in order to facilitate the Securities and Exchange Commission's "acceleration of convergence" of the two sets of standards. Since the move to convergence began, emphasis has shifted from reconciling the standards to dropping U.S. GAAP altogether in favor of IFRS. The story quotes FASB member George Batavick as saying, "If ultimately convergence is going to be on IFRS, why not just go ahead and adopt their standard lock, stock, and barrel?"
Doing so may be simpler, but it's not going to make the transition happen more quickly. As Northeastern University assistant accounting professor Charles Bame-Aldred told me in a recent phone conversation, the two standards will more than likely co-exist until the SEC specifically requires the switch:
Unless there is a requirement, people are going to do what they're used to, and also what's less costly. Because if I have to go through and change systems, retrain people, I'm not going to do that if there's no incremental benefit.
Financial Accounting Standards Advisory Council chair and Webcast moderator Dennis Chookaszian acknowledged this reality and noted that a more immediate goal for the FASB is to maintain the current system while the transition is being made. To that end, there are new accounting rules, CFO.com says, that address "deficiencies in accounting and reporting."
I know I've said much the same thing about other regulatory schemes, but the sentiment applies here: Why is there a need to continue tweaking U.S. GAAP while the wrinkles in IFRS adoption are ironed out?
If we're moving to IFRS, fine. I understand that it won't happen tomorrow. Iron out the wrinkles, figure out how it will work, and then require the changes. All the changes and additions to U.S. GAAP in the meantime serve to do nothing except confuse those who must implement them, and then turn around a year or two later and learn something different.