As the IASB and FASB work together, where will the opposition come from?
Well, that depends on the standard. On the table right now are proposals for handling derivatives. Most countries don’t have a standard; the United States does. It’s quite evident that the big problem there is not going to come from the United States, it’s going to come from Europe and elsewhere, where institutions that have not had a standard like it that way. The standards on stock options, which everybody expected to be very explosive, are still going to get big opposition, and most of the opposition there will be in the United States — I believe from high-tech industries. But they’re much less controversial today than they were a year ago. Why would accounting for derivatives be controversial? I’m not supposed to comment on technical things, but I will tell you what the issue is here. In general terms, banks are active users of derivatives, and, although it’s more complicated than that, they fear that accounting for the changes in value in derivatives will create a lot of volatilit
