Only a handful of US companies would adopt international financial reporting standards if they had the chance, according to a survey of chief financial officers.

The Securities and Exchange Commission is consulting on the idea of offering US businesses the opportunitY to file financial statements using IFRS, the international system that is being rapidly adopted outside the US, or continue to file under GAAP, the US system.

According to a survey by Duke University and CFO Magazine, 70 per cent of US companies said they were unlikely to adopt the standards, with only 9 per cent keen to do so.

European Union countries adopted IFRS in 2005 and more than 100 countries, including India, Japan and Canada, are either using the standards or preparing to do so.

The aim is to provide a single global accounting language that should aid cross-border investment.

The International Accounting Standards Board and its US counterpart, the Federal Accounting Standards Board, have been working since 2002 on a project to “converge” the two sets of standards. This year, the SEC surprised markets – and seemingly gave its approval to IFRS – by opening the possibility of dropping its requirement for foreign companies to reconcile their own accounts with US GAAP – an expensive and time-consuming exercise.

The convergence project and the dropping of the reconciliation are highly sensitive subjects and have generated controversy. In July, Paul Boyle, the UK accounting regulator, upset policymakers when he suggested that standard setters should rethink convergence focus.

Just less than half of those surveyed said they supported a single set of financial reporting standards and almost a third felt that IFRS and US GAAP can co-exist.

“A lot of people like the idea of convergence from a theoretical perspective but in terms of making the practical translation, it’s a daunting task,” said Kate O’Sullivan at CFO Magazine.

Familiarity might play a part in attitudes; only 14 per cent said they were very familiar with IFRS.

“Those companies who have multinational operations are going to be more familiar and are more likely to adopt IFRS,” Ms O’Sullivan said.

IFRS usually takes a broader, more principles-based approach than GAAP, which is tightly rules-based. Many are concerned that converging the two systems means, in practice, adopting one of the two approaches. IFRS users fear GAAP-style rules, and US investors are often leery of the leeway given by a looser, principles-based system.

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Brussels backs management’s view

Financial statements that are presented according to how the management views the business would be more useful and relevant, the European Commission said on Tuesday. The claim, part of an impact study prepared by the Commission over a controversial new accounting standard, will dent the hopes of investors who had made a last-ditch appeal to Brussels to derail the standard’s adoption.

IFRS 8 lays out how businesses should report their different segments. It is mostly a copy of the US standard, FAS 131, and part of the project by the US and international standard-setters to converge the two sets of standards.

Some claimed the “management approach” of IFRS 8 would allow executives to hide the truth and that it would make comparisons between companies more difficult – something the Commission’s study refuted.

Investors said yesterday the new paper still had not addressed their concerns and cited problems encountered by US analysts who are already using the US version.

The level of protest over IFRS 8 surprised and alarmed the IASB, which has since made overtures towards investors. Last week, chairman Sir David Tweedie met with a group of the IFRS 8 dissidents in the first of what will become regular meetings.

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