Global Accounting Standards - A Success Story? An Empirical Investigation of the First FASB & IASB Convergence Project

20 Pages Posted: 31 Jul 2008 Last revised: 13 Aug 2008

See all articles by Ulf M.T. Luthardt

Ulf M.T. Luthardt

Tilburg University

Jochen Zimmermann

University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control

Jan Bulla

affiliation not provided to SSRN

André R. Meier

University of Bremen - Faculty of Business Studies and Economics

Date Written: May 2008

Abstract

Business Combinations is the first completed joint convergence project of the FASB & IASB. The new business combinations standards converge US GAAP and IFRS in all but the calculation of non-controlling interests. Although the accounting community widely acknowledges the benefits of accounting harmonization, the drafts of new standards were met with overwhelming rejection.

It rarely happens that an exposure draft for a standard predominantly receives disaffirmation. The ill-fated nature of the first joint exposure draft gives rise to a number of questions. The standard setters may have misjudged the respective concerns of the traditionally clustered interest groups of users, preparers, auditors and academics. It may also be that the new task of combining constituent groups from different regional and jurisdictional back-grounds has proved too difficult.

We analyse comment letters on ED 3 and SFAS 141 and examine whether the approval or dissent of respondents is related to a regional (FASB vs. IASB) or professional (user vs. preparer) grouping scheme. We provide evidence that preferences are largely regional de-pendent on and not aligned with membership to professional constituency groups. The results give rise to concerns about the implications of global standards (setting) and its implications on compliance (possible adoptions of locally flavoured accounting standards).

Keywords: Accounting standards, Business combinations, convergence project

JEL Classification: M41, M44, M47, G38

Suggested Citation

Luthardt, Ulf Michael Thomas and Zimmermann, Jochen and Bulla, Jan and Meier, André R., Global Accounting Standards - A Success Story? An Empirical Investigation of the First FASB & IASB Convergence Project (May 2008). Available at SSRN: https://ssrn.com/abstract=1135270 or http://dx.doi.org/10.2139/ssrn.1135270

Ulf Michael Thomas Luthardt (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Jochen Zimmermann

University of Bremen - Faculty of Business Studies and Economics ( email )

Hochschulring 4
Germany
+49 421 218 9121 (Phone)

University of Bremen - Chair of Accounting and Control ( email )

Universitaetsallee GW I
Bremen, D-28334
Germany
+49 421 218-9119 (Phone)

HOME PAGE: http://www.controlling.uni-bremen.de

Jan Bulla

affiliation not provided to SSRN ( email )

André R. Meier

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany

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