Fred notes that the SEC has, in fact, permitted foreign companies that list in the States to report their results under international accounting standards without reconciling them to GAAP. (I was keeping my eye out for this announcement, but it apparently wasn't important for the SEC to include it in its headlines, news digest, recent news, or what's new sections of its web site). The US has long thought that its accounting standards are different, and better, than those of the rest of the world, which has made the process of harmonizing securities rules - the holy grail being to let any company list on any stock exchange - a very difficult one.
But now foreign companies don't have to reconcile their returns to US GAAP, and it may soon be the case that American companies are permitted the option of using IFRS (the foreign accounting version) or GAAP.
It's quite a turn towards globalization by the proud isolationists in the US financial regulatory millieu and, as if regulation is your thing, it's quite a success for a rather informal, public-private initiative out of London, the International Accounting Standards Board, which developed IFRS. Now IASB and FASB are hard at work on converging towards one international accounting standard, and they're not doing it through a treaty, or a coordinated set of laws, or even through regulatory cooperation. Rather, the lead has been taken by an NGO. It's not unprecedented in financial regulation, or necessarily a bad thing (though it often isn't very transparent or accountable), but the process is so informal that I wrote two papers about it.
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