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Accountancy standard deadline may be missed

A deadline of June 2011 by which time leaders of the Group of 20 industrialised nations hope to bring together a global accountancy standard is likely to be missed with very little progress to date. It seems as though American and European counterparts are unable to agree on how to value financial instruments such as derivatives, etc and we are now entering a long drawn out process which could see the deadline of June 2011 pass by.

The main stumbling block is the ability to incorporate the US Generally Acceptable Accounting Principles and the International Financial Reporting Standards into one global accountancy standard. European counterparts are arguing that the US system would exacerbate the fall in derivative assets and has the potential to cause problems in the future. However, the US counterpart in the accountancy world believes that the US system is more conservative and more realistic.

When you also take into account that the European Union is placing more and more pressure upon the European accountancy standards body to incorporate more EU accountancy guidelines we are entering very difficult times in the world of accountancy standards. Many people believe that ultimately a global accountancy standard is unlikely to be agreed in the short to medium term.

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