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July 19, 2012



Good for you for getting through 127 single spaced pages of something the SEC does not want you to read. What you learn and share is a real service to us all.

Stephen Bouvier

My apologies for not commenting on this sooner …

As a journalist who follows this issue, watching the SEC and its machinations over IFRS is best likened to discerning nuance in a Soviet-era dictatorship. It is almost as if the SEC wanted to give us a model of how NOT to make public policy.

However, there is a basic in all this that rarely gets aired: what precisely was the U.S. supposed to endorse?

An unfinished financial instruments model that many FASB members clearly dislike? A lease accounting model that has yet to become an exposure draft? An incomplete revenue standard? Or, how about an insurance liabilities standard that some U.S. insurers neither want nor need?

Even if we assume that the U.S. was in some way prepared to endorse some half-finished documents that 'might' make it into GAAP, is the U.S. truly ready to cede sovereignty over its tax policy to the IASB?

Once you say that tax law follows GAAP, you are completely at the mercy of whoever decides what GAAP is … as the UK government has discovered when it said the tax treatment of certain investment funds should follow IAS 39's classifications. Great.

Anyone want to tell Congress that they'll just have to wait until GAAP is settled before they can change a tax rule?

And if you were Mary Schapiro, would you want to pull the switch? I'll be honest and say that I wouldn't. When the standards aren’t even finished, it’s like asking someone to bungee jump without the cord.

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