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Friday, June 3, 2011

IASB Parent Launches Search for New Chairman

The term of International Accounting Standards Board Chairman David Tweedie is set to expire in June 2011, which also happens to be the timeframe for the IASB and FASB to complete the massive amount of work they've undertaken to converge significant accounting guidance under the 2008 version of their memorandum of understanding. 

If the two boards are successful (a big if, most say), then U.S. and international standards will be substantially converged on such key issues as accounting for financial instruments, leasing, and revenue recognition, as well as several other significant projects. But work is unlikely to be done on all projects by that time, making it a rather tricky transition period.

The parent of IASB, the International Accounting Standards Committee Foundation Trustees, announced Nov. 6 that they are seeking candidates to fill the IASB chairman position, which Tweedie has held since the group was originally organized in 2001. Press release:  http://www.iasb.org/News/Press+Releases/Trustees+seek+nominations+for+Chairman+of+the+IASB+from+2011.htm 

The IASCF trustees have given themselves a lot of time to look for a new chairman, but they may need that much time to find someone to fill the job. Suggestion: Look for someone with a tough skin to withstand complaints from all quarters.

A complicating factor is that several other IASB members who have served on the board since it was first organized are also nearing the end of their term. The terms of the following IASB members expire in June 2010:

* James Leisenring

* Gilbert Gelard

* Robert Garnett.

And the terms of the following members expire in June 2011 along with Tweedie:

* Warren McGregor

* Tatsumi Yamada    

That's a substantial change in the board, and the people named to fill these positions will be key in determining the shape of international standards.

There are some who have speculated that FASB Chairman Robert Herz might become chairman of IASB, after the U.S. agrees to permit use of international standards for domestic registrants in the United States (whenever that may be). Herz' term as chairman of FASB expires in mid-2012.  Certainly, the role of FASB will be much diminished if the U.S. moves to IFRS.

But the work that FASB has been doing on financial instruments (especially on consideration of expanded use of fair value) has made the board a very unpopular entity in European circles.  

Who do you think would make a good IASB chairman and why?

----Susan Webster, managing editor of Accounting Policy & Practice Report

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