Friday 6 May 2011

IFRS - What shape will it take in future………!!!


IFRS – International financial reporting standards which are been looked upon as the future of accountancy and a effective tool for promoting free movement of capital and promoting transparency, will definitely play its intended role in future. With more than 120+ countries following these standards and Biggies like USA, JAPAN, INDIA and CHINA going for convergence, picture seems to be perfect and efforts on target.
But, what about the motive behind these standards ? Is USA playing its dominating role here too?
After the Norwalk agreement, US planned to go for convergence to IFRS and all the necessary steps were taken, plans where chocked out and everything done. FASB the body that frames US GAAP, got its representative in IASB and along with this got IASB and FASB to work together on every project, don`t know why this did not happened in case of other countries, why they were not actively involved in framing new IFRS`s . Thus, now every new IFRS or changes in existing IFRS requires FASB`s nod.
If this continues IFRS will be a small version of US GAAP in future, even if not atleast will be influenced by US GAAP. I am not saying US GAAP is not effective or its not a set of quality standards.  The question is Why US is given special treatment over other economies, Why aren’t all the countries working together if  we plan for GLOBAL ACCOUNTING STANDARDS “IFRS”. 

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