The story so far...

A recent KPMG report, International Financial Reporting Standards: Views on a Financial Reporting Revolution, consists of interviews with standard-setters, regulators, CFOs, analysts and auditors from around the world. Many of them have been surprised at how smoothly the implementation of IFRS has gone to date. However, the report highlights some critical issues ahead, including US convergence, consistency of interpretation, rules versus principles, fair value and complexity of accounts. An overview of the issues is available on the KPMG website.

Challenges and Successes in Implementing IFRS

It is clear that there are many challenges to achieving international convergence. What must be done nationally? What support, if any, can be expected from the international standard setters? How will national initiatives to achieve international convergence affect the reporting entities in a country, what actions should be taken nationally to address these effects, and who should take these actions? How can the education and training of professional accountants keep pace with the changing environment in which the international standards are being set? Who will keep investors, analysts, journalists and members of the public informed of these changes and their consequences? To learn more, read Challenges and Successes In Implementing International Standards: Achieving Convergence To IFRSs And ISAs.

Going Global

Introducing IFRS into Canadian GAAP is something that will take time. Many provincial and federal laws refer to Canadian GAAP and the CICA Handbook. Until those are amended to refer directly to IFRS, there will be a need to incorporate IFRS changes into the Handbook as part of the transition. See the article on Going Global in the June 2006 issue of CAmagazine.

A Roadmap for Convergence

The push for organizations to use one set of worldwide accounting standards is speeding up. A major breakthrough came early this year when the U.S. Financial Accounting Standards Board (FASB) and the IASB agreed to address major differences by an interim target of 2008. They will concentrate on seven financial reporting areas, making their first priority common standards for business combinations. The result will be a high degree of convergence by the world's two most important standard-setting bodies. To learn more, see the Memorandum of Understanding between the FASB and the IASB, A Roadmap for Convergence between IFRSs and US GAAP - 2006-2008.

Working Relationships between IASB and Standard-Setters

Early in 2006, the International Accounting Standards Board issued a Statement of Best Practice: Working Relationships between the IASB and other Accounting Standard-Setters. The Statement is particularly relevant to standard-setters in jurisdictions that have adopted or converged with IFRS, or are in the process of doing so. It identifies a range of activities that should be undertaken. Some are new or different from the way in which the IASB and other accounting standard-setters have operated in the past. Others are a confirmation of practices that are already being undertaken.