Adopting IFRS would benefit the United States’ economy, the new chairman of the International Accounting Standards Board (IASB) said July 29 during his first official visit to China.
Speaking to a gathering of the Ministry of Finance’s Accounting Regulatory Department in Beijing, Hans Hoogervorst said, “U.S. investors invest globally, and U.S. companies seek international capital, and it is in the economic interest of the U.S. to adopt IFRSs,” according to a copy of the speech posted on the IASB website. “IFRSs support economic growth and establish a high-quality level playing field for globalized markets.”
Investors similarly will be able to better diversify their portfolios and benefit from increased comparability, Hoogervorst added.
“Difficult as the decision may be, it is hard to imagine the possibility of the United States not taking a positive decision” with regard to IFRS adoption, Hoogervorst said. “I am convinced that the United States will want to maintain its position of leadership in international financial reporting.”
The SEC has said it will decide whether to adopt the standards by the end of this year.
In his speech, Hoogervorst called upon other countries that are working to align national standards with IFRS but have not yet adopted to “come fully on board and help to make this an even more global organization. The big-growth economies should assume the leadership role that their economic strength is calling for.”
Hoogervorst outlined four priorities for the IASB going forward:
- Completing ongoing IFRS convergence efforts “to the highest possible standard.”
- Setting an agenda for the IASB’s post-convergence work. Last week, the IASB published a consulting document designed to solicit input from the world’s financial and accounting communities.
- Addressing the “missing pieces of the IFRS jigsaw” by securing the participation of key countries not currently using IFRS.
- Strengthening institutional relationships in a way that “respects and enhances” the independence of the standard-setting process.
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