Convergence of Accounting Standards

>Accounting Standards play an important role to ensure that reliable, comparable and unbiased financial information are available to various stakeholders. In recent years, an increasing need has been felt for international harmonization of the standards. It is difficult to understand company performance when financial information originates in different geographic locations. The IASB co－operates with national accounting standard－setters to achieve convergence in accounting standards around world. Towards this end, IASB has issued IASs and IFRSs, and to which many countries across the globe are converging. It would appear that the SEC believes that the structure for establishing international accounting standards is in place and it is time to move on to a comprehensive infrastructure that is required for the establishment of truly global securities markets. Both the IASB and the FASB recognize the relevance of the ‘roadmap’ for eliminating the need of reconciliation requirement between IFRSs and U.S. GAAP. The removal of this reconciliation requirement would depend on the effective implementation of IFRSs in financial statements in presenting priority issues on the IASB－FASB convergence program. The elimination of the current reconciliation requirement is not dependent on the FASB and the IASB resolving the differences between their regimes. Rather, it requires continuous progress toward the goal that benefits will in fact be achievable in practice.