LONDON – The United States has been offered a seat on a new global accounting panel, in a move that the body behind the initiative hopes will help persuade the world's biggest capital market to adopt its rules.
Lack of U.S. adoption has been a glaring gap in efforts to create a set of truly worldwide accounting rules. The International Accounting Standards Board (IASB) is therefore offering the United States a seat on its new 12-member forum of national and regional accounting bodies, hoping this will help bring it into the fold.
To the dismay of U.S. accounting officials, the original criteria for panel membership ruled out the U.S. Financial Accounting Standards Board (FASB) joining, as it does not use IASB standards and hasn't pledged to do so.
IASB Chairman Hans Hoogervorst said on Monday membership rules will be changed by the time the new panel holds its first meeting in April so the world's biggest capital market can join.
Michel Prada, chairman of the IASB's trustees, who will select panel members, said: "We very much hope our U.S. friends will join. We obviously need their contribution."
The IASB, whose rules are used in over 100 countries, is treading a fine line between throwing in the towel on U.S. adoption after a decade spent trying to align global rules, and keeping the door open.
Earlier this month, the G20 top economies reiterated its call for a single set of rules for investors and gave the IASB and FASB until December to say how this will be done.
The IASB, which has several Americans as board members, faces a funding gap as contributions from the United States diminish and there is also a need to replenish reserves.
Prada said the IASB is stuck in an ambiguous position.
"Now we are in a sort of situation people are waiting and wondering what's next," Prada said. "The message we have to convey to our U.S. counterparts is that they have to help us get out of this situation and find a new way forward."
The U.S. decision would be taken by the Securities and Exchange Commission which is undergoing major staffing changes amid a heavy post financial crisis workload.
Prada said the U.S. Treasury still backed a single set of global rules and he was trying to garner more political backing from the International Monetary Fund and the Financial Stability Board, the G20's regulatory task force.
(Editing by David Holmes)