The IASB has been frustrated with heel-dragging on this side of the pond for as long as the U.S. has been pretending to work toward adopting international financial reporting standards. Despite the fact that only a few short weeks ago, we thought progress on shared revenue recognition rules meant promise for convergadoption.
At that time, IASB chair Hans Hoogervorst said "[t]he fact that we managed to stay converged with our colleagues of the FASB is very important and we intend to stay converged in the future."
Hoogervorst's colleague, however, does not share that rosy view, despite calling revenue recognition the "Jewel in the Crown" of convergence.
The Financial Accounting Standards Board is advocating an approach to international accounting that has been a “miserable failure” for 25 years, Ian Mackintosh, the vice chairman of the International Accounting Standards Board, said earlier this week.
Rather than continuing to pursue the goal of a single worldwide set of financial-reporting standards, FASB has returned to an approach that accepts the differences between countries and works to minimize them, Mackintosh told the IFRS Foundation Conference in London.
In his prepared remarks, he suggested that FASB leaders and the board’s parent organization, the Financial Accounting Foundation (FAF), were “turning back the clock” to a time before the two boards had begun seeking accounting convergence a dozen years ago.
Specifically, Mackintosh says not to worry about divergences, and calls BS on "cultural differences" cockblocking full convergence:
If divergences are more or less accepted as inevitable, it can be no surprise they become the norm rather than the exception. If all IASB constituents were to insist on the primacy of national preferences, obviously the goal of a single set of global standards would come to naught. That was the old IASC approach. We tried it for 25 years and it failed.
Moreover, I do not buy the argument that cultural differences mean that a 'one size fits all approach’ cannot work. Our Board and staff work incredibly hard to develop principle-based standards that can be adopted by countries around the world, regardless of their stage of economic development and their legal culture. As a result, countries with cultures as diverse as Brazil, Canada, Colombia, Germany, Japan, Korea, Mexico, Nigeria, Turkey and of course the United Kingdom have all adopted IFRS without major issues. Indeed, there is more cultural diversity between the UK and France than between the UK and the US, yet both France and the UK report using IFRS.
Your move, FASB.