Magazine article Management Review

You Say Po-Tay-To, I Say Po-Tah-To

Magazine article Management Review

You Say Po-Tay-To, I Say Po-Tah-To

Article excerpt

It was a case of an international accounting organization coming to the Securities and Exchange Commission in 1987 and asking what it would take for international standars to conform to SEC regulations. The London-based group, International Accounting Standards Committee (IASC), had been wrestling with global accounting rules for 14 years by that time, and no end was in sight.

"The SEC wanted disclosure requirements upgraded and more financial disclosure, a matter of 'dot the i's and cross the t's,'" says Richard J. Reinhard, an associate chief accountant at the SEC who has been monitoring the IASC's progress. "The IASC has come a ramarkable way since 1987."

Indeed, the IACS seems to be nearing its target: Some 80 countries including the United States have said that, although they are not committed to enacting the rules, if the standards are found to be acceptable, they might recognize the regulations as allowable for foreign companies doing business within their boundaries. Many nondeveloped countries, Reinhard points out, do not have enough resources to have their own standards to monitoring foreign securities; the IASC standards would serve the function.

Reinhard says the simple payoff to companies in the long run would be that when they do business in another country, standards would be similar and would help them save a lot of money. "In the long term, if these standards are of a high level, the international standards and U.S. standards are likely to converge," he explains. "It also will ensure that foreign subsidiaries of a company will use the same method of accounting."

To be sure, there are "interested parties"--active U.S. corporate observers with foreign operations who are making suggestions. Reinhard lists Citicorp, ITT, AT&T and General Motors as such obeservers.

The IASC rules are expected to consist of a set of standards that will cover the most frequently encountered accounting transactions: normal business combinations like acquisitions and joint venturesm normal inventory and depreciation costs, research and development, and such financial instruments as futures contracts and options. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.