BY PAUL B. W. MILLER AND PAUL R. BAHNSON
The top 11 falsehoods
about the IASB, IFRS
and U.S. adoption
Paul B. W. Miller is a professor at the
University of Colorado at Colorado Springs
and Paul R. Bahnson is a professor at Boise
State University. The authors’ views are
not necessarily those of their institutions.
Reach them at email@example.com.
Although weary from writing about he concerted push to embrace the International Accounting Standards
Board and adopt IFRS in the U. S., we remain
wary because lobbyists continue publishing
propaganda-like announcements to advance
their dubious interests.
We’re not being glib when we use the term
1. Establishing uniform international
“propaganda,” which is defined as: “infor-
mation, especially of a biased or misleading
nature, used to promote or publicize a par-
ticular political cause.”
We’re confident that most adoption apol-
ogists, especially the American Institute of
CPAs, the large accounting firms, and the
IASB, know that IFRS is seriously flawed.
However, they maintain the subterfuge with
simplistic claims that don’t hold up under
closer scrutiny. This column discredits their
arguments by explaining the top 11 false-
hoods that continue to be foisted on the
profession and others.
standards will produce comparability.
FALSE. We first remember hearing this
bogus justification for mediocrity when our
early instructors said: “The results are com-
parable because everyone is doing the same
thing.” In August 1978, Paul Miller disproved
that claim in The Journal of Accountancy. The
Financial Accounting Standards Board’s orig-
inal Conceptual Framework incorporated his
analysis with these words: “The consistent
use of accounting methods, whether from
one period to another within a single firm,
or within a single period across firms, is a
necessary but not sufficient condition of
Uniformity is an input quality; comparabil-
ity, on the other hand, is a quality of outputs.
For example, uniformly writing off R&D costs
isn’t useful because it doesn’t distinguish
successful efforts from the unsuccessful. If
two companies own real estate with the same
cost but different values, uniformly report-
ing them at cost doesn’t allow users to detect
their dissimilar future cash-flow potentials.
Therefore, comparability exists only when
statement users can identify real similari-
ties and differences. Uniformly applying
IFRS will not produce comparability until
the standards require managers to report the
whole, unvarnished truth.