U.S. Moves Toward International Accounting Rules

[SAdams]

Another move into the "New World Order" as per UN Charter. Americans are going to have to learn new accounting practices. I guess 2 + 2 will no longer equal 4.

How much do you want to bet that the mistakes caught will be blamed on the change of procedures. And we the people will pay the difference again. Can't have them paying for the mistakes, can we?

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U.S. Moves Toward International Accounting Rules

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By FLOYD NORRIS
Published: August 27, 2008

The Securities and Exchange Commission moved Wednesday to allow some large American companies to begin using international accounting standards as early as next year, and to require all American companies to do so by 2016.

The commission voted unanimously to propose for comment a “road map” for conversion, with eventual adoption depending in part on revised provisions for financing the group that writes the international standards.

The adoption of international accounting standards by the United States would move the world toward one set of standards, which should make it easier for investors to compare companies operating in differing regions, and make it easier for firms to raise capital in whatever market seems most attractive.

“The proposed road map is cautious and careful,” said the chairman of the S.E.C., Christopher Cox.

Under the proposal, a small group of large companies, which the S.E.C. estimated at about 110 firms, would be allowed to use the international rules in financial statements issued after Dec. 15, 2009. This means companies on a calendar-year basis could use the international rules for their 2009 annual reports.

To be allowed to do that, the company would have to be among the 20 largest companies in its industry around the world, and a large number of its competitors would have to already be using the international standards.

The commission said it would consider requiring large American companies to move to the international standards for their 2014 financial statements, with smaller ones required to make the move in 2015 and the smallest — but largest number — allowed to delay until 2016. Under the plan, a final decision on those companies would be made in 2011.

That decision would be made by an S.E.C. whose chairman would have been appointed by a new president. But by allowing some American companies to stop using American rules before that, the current commission would make it difficult for a new chairman to reverse course.

While there is widespread agreement that one set of standards would have advantages for investors, there are concerns about the transition and about how uniform the accounts will be. American companies and auditors will have to learn new accounting rules.

The European Union has asserted the right to approve or modify each standard issued by the International Accounting Standards Board, and did allow banks to ignore part of one standard. In an effort to deal with that issue, the S.E.C. has said it would accept filings using international standards only if they complied fully with the standards as issued by the board.

That decision, however, could raise its own problems if, in the future, the international board were to issue a standard that the S.E.C. believed was wrong. Now, if the United States rule maker, the Financial Accounting Standards Board, considers such a rule, the S.E.C. can block it, or effectively overrule it.

The international authorities are considering establishing a new monitoring body that would include regulators from many countries, which might have the power to approve or reject appointments to the board. If that group also had power to reject standards, it would raise fears that political considerations could damage the independence of the rule makers.

Mr. Cox said he thought that body could help to protect the board from politics and special interests, but some Europeans have praised the idea in the hope it would make the standard setters accountable to government officials.

There would also be the question of uniform application of the rules. Early this year, the French regulator evidently approved a decision by a French bank, Société Générale, which moved losses from a scandal from 2008, when they occurred, to the previous year. That move outraged some members of the international accounting board, and some regulators, but nothing was done about it.

If the road map is eventually adopted, the result will be a wholesale change in American accounting rules. While the international board and the American board are working to bring convergence of the rules, there remain differences, as well as entire areas on which the international rules are silent.

While it is often said that the international rules are based on standards, and the American ones on rules, the differences are more in degree than nature. Still, in many cases the international rules will require more professional judgment from auditors. Some auditors have liked rules, because they enable them simply to tell a company that a proposed accounting treatment violates a rule. Also, rules ostensibly provide a defense if the accounts are later challenged in a lawsuit.

In a world with more professional judgment, the auditors would be expected to tell companies that a given accounting treatment violates a standard because it produces a misleading result. Whether they would be willing to do that, and whether all would be equally willing, could become an issue.

The major accounting firms have broadly endorsed the move. The international standards provide “the best opportunity to achieve the goal of a single set of high quality standards” around the world, said David Kaplan, a partner at PricewaterhouseCoopers. “The commission took a significant step today toward that objective.”

The S.E.C. previously decided that, beginning this year, companies that follow international accounting rules and have securities registered to trade in the United States, will no longer have to reconcile their books to American standards.

The S.E.C. said it would seek comments from the public on how much information will need to be provided by American companies making the shift. It could be as little as reconciling the numbers for only the first year that the new rules are used.

Another issue is the financing of the International Accounting Standards Board, which now comes from contributions from companies and accounting firms. The Financial Accounting Standards Board used to be financed in the same way, but the Sarbanes-Oxley law passed in 2002 changed that, instead giving it the right to levy charges on public companies. That was viewed as necessary to assure its independence.

Conrad Hewitt, the chief accountant of the S.E.C., said he was confident that within five years the international board would have secured a stable financing mechanism.

In another action, the S.E.C. approved a rule requiring that foreign companies registered with it file their annual reports within 120 days of the end of their fiscal year, rather than the current requirement of 180 days.

[advocate]

How does that fit in with the North American Union?

More importantly when will the US Treasury begin to use even US accepted accounting standards? We have trillions of off the books liabilities that are aren't ever considered in the "deficit/debt" figures that politicians in office prefer to have published.

[Pineygirl]

It seems very weird to me, too.

When you invest in international equities, they WARN you about "international accounting standards."

So now we're going to DO them?

Sheeesh, I tell you, it's a perfect storm of weird stuff all coming together like some harmonic convergence.

No human being could have put all of these forces together so perfectly, at the perfect time, to create what's happening right now.

It's going to be a VERY interesting couple of years, huh?

[Pineygirl]

Think we can levitate the Pentagon?
HAHAHAHA!

[SAdams]

BINGO! You have answered the $1,000 dollar Question. But you really can't appreciate it until you question the IRS on their accounting practices.

NOW you will see the "Dog and Pony, Smoke and Mirror" Show. You don't even have to go that far. Just go to Trenton and ask for their criteria. You will see people scatter from the room faster than cockroaches when the light comes on.

[SAdams]

Piney, can you say UN CHARTER? US turning to Script as currency.

IT'S COMING!!!!!

[Pineygirl]

Originally Posted by SAdams

Piney, can you say UN CHARTER? US turning to Script as currency.

IT'S COMING!!!!!

I'm telling you, I'm starting to believe more and more in those 12 guys.

Back in the 90s I did a LOT of research into the usual suspects. You know, the Bilderbergs, the Illuminati, etc.

I came to the conclusion that I couldn't come to a conclusion. Conspiracies are impossible to prove one way or the other.

But recent events are so spooky that it's either those 12 guys or God Himself who are engineering circumstances to be what they are.

Think about everything, from Carter's issues with Iran to Clinton's failure to catch bin Laden to Bush's missteps in Iran to Hillary's losing the primary to Katrina, and now Gustav. Oh, I could go on and on.

EVERYTHING is coming together at once, funnelling down to a point in time.

It only remains to be seen what it all means.

Scary. Scary. Scary.