(((I know that accounting is the dullest profession in the world, but
I'm wondering how many American companies, when assessed under these standards, are gonna pull an Enron. In other words, how many
American corporations are just American accounting games? How many will turn out to have no assets?)))
http://www.economist.com/daily/news/displaystory.cfm?story_id=12010009
Link: Accounting standards | Closing the GAAP | Economist.com .
SCORE a point for globalisation. In a landmark vote on Wednesday August 27th America’s financial-markets watchdog, the Securities and Exchange Commission (SEC), paved the way for its companies to switch from America’s Generally Accepted Accounting Principles (GAAP) to international accounting standards. In a field that is, by reputation, notoriously dull, this looks like something to get genuinely excited about.
GAAP was the beancounter’s gold standard for decades, but it is now widely seen as cumbersome. Most other countries have embraced the international rules, known as International Financial Reporting Standards (IFRS). The regulators’ plan envisages American-based multinationals switching to the standards voluntarily in 2010. The SEC would then vote on whether to require all other companies to do the same, starting in 2014. The commission has already cleared the way for overseas firms to use IFRS when doing business or listing securities in America.
Christopher Cox, the SEC’s chairman, hailed the move to an “international language of disclosure, transparency and comparability.”...
