International Accounting Standards Committee Holds First Open Meeting

By James L. Craig, Jr., CPA

The International Accounting Standards Committee board, in response to criticism of its international standards, opened its deliberations to the public for the first time March 16­19.

These meetings, held in Washington, D.C., were the first in the United States since 1992. Approximately 20 observers viewed the board in action on the first day.

The IASC board has final authority over issuing international accounting standards. The group includes representatives from 13 countries (including the United States) and three interest groups, the International Council of Investment Associations, the International Association of Financial Executive Institutes, and the Federation of Swiss Industrial Holding Companies, for a total of 16 votes. The board issues exposure drafts and final statements based upon a 75 percent majority--12 must vote in favor. FASB and several other organizations can take the floor for debate and discussion but cannot vote. Similarly, a delegation from China that attended the March meetings could speak but not vote.

The board gave little weight to China's concern about the use of fair values for certain investment properties. China's delegation said that many undeveloped countries would not have the people or knowledge to arrive at fair values of investment properties and therefore urged that accounting standards keep cost as an alternative measure. The board's Secretary General Sir Bryan Carsberg responded that a major goal was to eliminate alternatives in accounting.

Two attendees responded favorably to the IASC board's decision to conduct open meetings.

"[The] board not only opened its meetings to observers, it also demonstrated its ability to tackle tough problems in an unbiased manner," said William Speakman, a Society member. "The conclusion to issue a proposal to carry certain investment property at fair value is a big step toward a common understanding of financial statements."

Another attendee observed that the debate was more lively and varied than typically found at FASB, where its seven board members often give consideration to matters at a more detailed level.