Ifrs Versus Usgaap

The announcements were important to promote the convergence process between IFRS (EU) and the USGAAP (US). In my opinion, the convergence (worldwide and not limited to EU and US) is crucial in the framework of the global economy. The recent financial crisis and the rising of BRIC economies brought new elements to the discussion.

Those decisions reflect a conflict of interests. By one hand, there is an interest in the uniformity, namely in the context of the multinational companies and the integration of markets (ex. merge NYSE/Euronext) . The uniformity promotes credibility, comparability and efficiency of communication. It also can promote public and shareholders trust. It avoids costs and competitive disadvantages when operating in global marketplace. By other hand, there are strong interests to have own rules. Accounting standards are not “neutral” and they can have important economic, political and even cultural consequences. Therefore, different agents (companies, managers, governments) have different perspective on some accounting rules and try to influence them (lobbying).

The decisions promoted the convergence and their consequences should not be underestimated. Before that, the convergence of IFRS and USGAAP seemed to lead to an eternal stand-off or an “American takeover”. In the meantime, there has been a large acceptance of IFRS. More than 113 countries , including Canada, BRIC and Mexico (main US trading partners), currently require or permit IFRS reporting. Coincidence or not, in late 2008, the SEC Chairman set out a timetable for US companies to drop GAAP by 2014 . The cooperation between FASB and IASB has entered a new stage.

In conclusion, I think market will lead the way and, in the context in which the US depends increasingly on international partners and markets, IFRS will prevail as a worldwide standard (of course, the influence of the US in IASB work needs to be taken in consideration).

Besides the famous Daimler Benz case,...