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IFRS Foundation Names Michel Prada Chairman

The IFRS Foundation, which oversees and fundraises for the IASB, announced today the appointment of Michel Prada as Chairman of the IFRSF Board of Trustees. Prada, former Chairman of the French securities regulator, the Autorité des Marchés Financiers (AMF) (note: google toolbar has a pretty neat translation function to translate the AMF website into English), and former Chairman of the Executive and Technical Committees of the International Organization of Securities Commissions(IOSCO), will serve a three-year term as IFRS Foundation Chairman, commencing Jan. 1, 2012.

Prada's appointment was unaimously approved by the IFRS Foundation Trustees, and subsequently approved by the IFRS Foundation Monitoring Board, according to the IFRS Foundation's announcement.

Prada brings a depth of experience in the international community. In addition to his service at the AMF and IOSCO, Prada was a founding member of the Financial Stability Forum (now the Financial Stability Board),  currently serves as Chairman of the International Valuation Standards Council, co-Chairman of the Council on Global Financial Regulation and is a non-executive Director of the International Centre for Financial Regulation.

He also served on the Financial Crisis Advisory Group (FCAG), a joint advisory group formed by the IASB and FASB to examine accounting and disclosure issues in relation to the credit crisis. FCAG has served to be a key source of IASB and IFRS Foundation leadership; following issuance of FCAG's final report and recommendations, FCAG's co-chairs now serve as Chairman of the IASB (Hans Hoogervorst) and as a member of the IFRS Foundation Trustees (Harvey Goldschmid). 

My two cents (please see disclaimer posted on the right side of this blog): I believe Prada's appointment will be looked upon very positively by the U.S. Securities and Exchange Commission and will be taken into consideration in the SEC staff's upcoming report and recommendations for consideration by the Commission in reaching a decision on when and how to incorporate IFRS into the U.S. financial reporting system.
As a practical matter, in my view, IFRS can be said to have been informally incorporated into the U.S. financial reporting system (and likewise, FASB standards into IFRS), through the convergence process that has been in place since the 'Norwalk agreement' reached between FASB and the IASB in 2002. However, the message in the last two speeches given by IASB Chairman Hoogervorst (in Melbourne, Australia in November and at the AICPA's National Conference on Current SEC and PCAOB Developments in Washington, DC last week) -and again, this is my personal interpretation - was that it is time to move from ongoing, indefinite convergence between FASB and the IASB, to picking a date certain (with appropriate transition time) for incorporating IFRS in the U.S., in order to move from a model of virtually permanent convergence efforts between two entirely separate boards, to one of ongoing 'endorsement' of IFRS by the U.S. FASB, with a stepped up, more formal level of involvement in IASB standard-setting by the FASB as well as other national standard-setting bodies (vs. the current 'consultation' model under which other national standard-setters are engaged). Read more in our related blog posts on Hoogervorst's recent speeches, and on the SEC Chief Accountant's statement re: current status of IFRS work plan taking 'a few additional months' to complete, before the Commission will consider its decision.

The FASB and IASB boards are slated to meet jointly this week (which they do frequently, periodically in person and the rest of the year via joint videocast). The agenda for the joint board meetings this week includes a discussion of the proposed standards on Leasing, Impairment and Insurance Contracts.    
Posted: 12/12/2011 9:50:11 AM by Edith Orenstein | with 0 comments
Filed under: convergence,FASB,Foundation,IASB,IFRS,IOSCO,Michel,Prada,SEC,AMF

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