Former FASB chair on IFRS and fair value: 'the two issues of the day, no question'.

• Author: Heffes, Ellen M.
• Position: Financial reporting - International Financial Reporting Standards - Financial Accounting Standards Board

Two articles highlight some key aspects of International Financial Reporting Standards. First, Ellen Heffes spoke with former Financial Accounting Standards Board Chairman Dennis R. Beresford about the roots of IFRS and his thinking on the current state of convergence. He also discussed fair-value accounting, which along with IFRS, he dubbed: "The two issues of the day, no question."

Beresford, the Ernst & Young executive professor of Accounting in the Terry College of Business at the University of Georgia, was inducted into FEI's Hall of Fame in 2006.

In a second feature, Steven Singer, who leads E&Y's Internal Audit practice, details the role of internal audit in IFRS conversion.--IFRS co-developers Cheryl de Mesa Graziano, CPA, vice president-Operations, Financial Executives Research Foundation, and Ellen M. Heffes, editor-in-chief, Financial Executive

The concept of "harmonizing" financial accounting standards across borders began in Europe around 1973, with the formation of the International Accounting Standards Committee (now International Accounting Standards Board), just about the same time FASB was formed. IASC's mission was to bring accounting to many developing nations that had no standards.

In the late 1980s, the IASC chairman had asked then-FASB Chairman Beresford to support its cause and participate as a member of its advisory council, which is similar to FASB's FASAC (Financial Accounting Standards Advisory Council).

Beresford said he was willing to "lend support to internationalization, if for no other reason, than to show that we [the U.S.] were leaders in accounting, and would help their process." At the time, he says, FASB had been pretty much "hands-off on international thinking."

In retrospect, recalls Beresford, the lASC's motive was a bit "selfish, as it actually wanted to get more support from the European Commission and felt if it gained U.S. support, it would motivate the Europeans, which turned out to be the case. However, he asked for--and received--a role as observer for FASB on the board.

By 1990, IASC's focus changed to become a provider of standards that multinational companies could use around the world--to develop one common set of standards that could be applied by companies filing on any country's stock exchange. Certain parties in the U.S. saw benefit to such an arrangement--including the New York Stock Exchange, as it wanted to encourage more foreign listings.

Since about 1992, IASC was also trying to...