The US shift to IFRS has been given a
major boost by President Barack Obama’s proposed overhaul of the US
financial regulatory system.

The US Treasury proposals, A New
Foundation: Rebuilding Financial Supervision and Regulation
recommend the Financial Accounting Standards Board, International
Accounting Standards Board (IASB) and US Securities and Exchange
Commission make substantial progress towards a single set of high
quality global accounting standards by the end of this year.

There were two other proposals on how
accounting standards should be improved.

The first was that accounting standard setters
clarify and make the application of fair value accounting standards
consistent, including the impairment of financial instruments, by
the end of 2009.

This is a project the IASB has committed

The Treasury also recommended accounting
standard setters improve accounting standards for loan loss
provisioning by the end of 2009, making the standards more
forward looking to combat issues of procyclicality.

It noted that the transparency of financial
statements must not be compromised in this process.

Mixed response

The US Chamber of Commerce expressed
disappointment with the plan, saying it unnecessarily added new
layers of regulation without providing comprehensive reform to the
current broken system.

The International Federation of Accountants
(IFAC) applauded the call by the US President for urgent progress
toward a single set of high-quality global accounting

“The President’s acknowledgment of the
importance of developing a high-quality set of global accounting
standards reflects the importance of global standards and a level
playing field in financial reporting,” IFAC chief executive Ian
Ball said.