significant progress has been made.

The other four are in various stages of

discussion.

Another example of international convergence in progress relates to

SFAS 157. As explained in the preceding section, SFAS 157 lays out a very

detailed map of fair value concepts. The standard is also very specific in its

disclosure requirements. The IFRS has no counterpart to SFAS 157 currently.

Guidance on fair value accounting issues is dispersed among several standards,

none of which is as detailed or requires the level of disclosures as

SFAS 157.

That will soon change. By the time this book is published, IASB expects

to have released an exposure draft of a new standard that will represent its

version of SFAS 157. IASB has stated that it will look closely at SFAS 157

as it prepares its exposure draft. IASB plans to utilize a three-level hierarchy

of inputs in its standard, mirroring SFAS 157. IASB hopes to finalize this

standard in 2010.

In the United States, another question that frequently arises regarding

international convergence is, what about all of the entities that are not publicly

traded businesses? Right now, the only planned conversion from U.S.

GAAP to IFRS is for public companies, as mandated by the SEC. That leaves

a tremendous number of other entities wondering what their accounting

principles will look like, such as privately held and small businesses, notfor-

profit organizations, and units of government. At this point, it appears

that there are four most likely routes that might be taken in the United

States:

1. IFRS becomes GAAP in the United States, meaning that both public
and other entities must use it, with perhaps some slight variations for

nonpublic entities (i.e., the IFRS for Private Entities standard). U.S. GAAP

as a separate set of principles would go away. Other comprehensive

bases of accounting, such as cash and tax basis, would continue as the

only alternatives to IFRS.

2. Some customization of either IFRS or IFRS for Private Entities is made

to tailor it to U.S. reporting needs.

3. A separate U.S. GAAP remains, but in a modified form. U.S. GAAP would

continue as a separate set of standards that would be used by private

entities.

4. The current version of U.S. GAAP would be carried forward, subject to

periodic change, as a separate set of standards for private entities.

The next few years should be interesting in the accounting world. There

are a tremendous number of very different users of U.S. GAAP, each of whom

will want to preserve or change certain elements of the current version of

U.S. GAAP.