A step towards convergence in M & A accounting.

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A step towards convergence in M & A accounting.

Many in the U.S. didn't have a problem with them, yet the business combinations standards have been modified--an early sign of the strengthening trend towards developing a high-quality, global set of accounting standards. Financial Executive and Financial Executives Research Foundation asked several experts to weigh in.

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Had Time Warner Inc.'s $15 billion Adelphia acquisition in 2006 been made under the recently revised accounting rules, Time Warner's financial statement would have looked quite different. Likewise for The Procter & Gamble Co.'s $55 billion-plus purchase of Gillette in 2005, and for privately held Koch Industries Inc.'s $21 billion purchase of Georgia Pacific in the same year. Different? Yes. Significant? It depends.

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And, whether the difference is good, bad or somewhere in between, that, too, depends on who you ask--whether it be a standard-setter, a user or a preparer of a multinational public or private company.

Such is the initial response to the first completed standards under the convergence efforts between the Financial Accounting Standards Board (FASB), for users of generally accepted accounting principles (GAAP), and the London-based International Accounting Standards Board (IASB), for users of International Financial Reporting Standards (IFRS).

The resulting new U.S. standards, Statement of Financi...

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