The convergence between US GAAP and IFRS might
not happen in the near future due to little interest from the US,
according to Ernst & Young partner Alan Millings.

Speaking at Ernst & Young’s Reporting
Outlook 2011 conference this week, Millings said:

“It really is the never-ending saga on whether
they will incorporate IFRS into the US reporting system for
domestics. I have to say I doubt it.

“There was a point when they started to seem
to be moving rather quickly under the previous chairman of
Securities and Exchange Commission, then a new lady (Mary Schapiro)
came in and I have to say it slowed down a lot. They just not see
it as something they necessarily want to do.”

Millings, who leads the EMEIA capital markets
team at Ernst & Young, also said US companies were mainly
concerned about the diversity in presentation and disclosure of
financial statements prepared under IFRS rules and had reservations
about the apparent lack of guidance on how to apply the

According to a study conducted by the SEC on
83 companies, one of the most critical points for US companies when
trying to apply IFRS was the fact global standards provide broad
principles and little guidance, as opposed to the very detailed
rules-based US GAAP.

Diversity, in terms of presentation and
disclosure between the two systems, was also a problem because it
resulted in some apparent non-compliance to IFRS.

“The US mentora is that if you have a
particular fact pattern then two completely separate companies
would apply that GAAP to that fact pattern and they would have
exactly the same measurement and disclosure. Anything other than
that, they’re usually not that keen on it” Millings said.