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Microcap & Penny Stocks : Zia Sun(zsun) -- Ignore unavailable to you. Want to Upgrade?

To: Randy berg who wrote (6842)	2/18/2000 10:41:00 PM
From: Sir Auric Goldfinger	Respond to of 10354

Yes, Randy, your general behaviour would indicate dwain bammage. "U.S. Companies Are Expected to Balk At Proposal to List Foreign Companies By ELIZABETH MACDONALD Staff Reporter of THE WALL STREET JOURNAL The race is on to get more foreign companies to list on U.S. stock exchanges under a proposed set of international accounting rules. But market regulators fear U.S. companies may cry foul because some of the international rules are much less rigorous than the bookkeeping rules U.S. companies must use to record profits. On Tuesday, the U.S. Securities and Exchange Commission surprised the markets when it released a plan to ask U.S. companies whether the agency should let foreign companies list here under international accounting standards being drafted by the London-based International Accounting Standards Committee. The SEC doesn't need U.S. companies' approval to proceed. It's still unclear whether the SEC would allow U.S. companies to use the international rules. The SEC says the plan could result in the agency's abolishing its decades-long requirement that foreign companies recast their books under the generally more onerous U.S. accounting rules, which has resulted in numerous foreign companies recording lower profits under U.S. standards. Currently, the U.S. and Canada are among the few countries that don't accept international accounting rules for use by companies listing on their stock exchanges. Market watchers say that if a common set of international rules were accepted in major global markets, it could help smooth the jet stream of global capital flows and accelerate global mergers. "No question, it will lead to more foreign companies [being] listed on U.S. exchanges," says Michael Cohrs, head of equity capital markets at Deutsche Bank AG's investment-banking unit in London. Adds Klaus Diederichs, co-head of global mergers and acquisitions at J.P. Morgan & Co. in London: "From an international perspective, accounting rules were clearly hampering many European companies from listing in the U.S. market." He adds that it is an administrative burden for European companies to run two sets of accounting standards. But the fear is that U.S. companies will balk at the plan, given that the Financial Accounting Standards Board says the proposed international standards are much less detailed than U.S. rules, plus they give companies more latitude to book the same item in different ways. Indeed, the FASB says more than 250 differences remain between the international and U.S. accounting rules. Proponents of the international standards play down the differences. "Most of the 250 differences the FASB cites are incredibly picky," says Pat McConnell, a senior managing director at Bear Stearns & Co., who helped draft the standards as a vice chairman of the IASC. Among the differences, the international rules let companies carry on their books the value of their hard assets, like factories or buildings, and intangible assets like licenses, using either fair-market values or historical values, says Carrie Bloomer, a top FASB official. Under U.S. rules, both tangible and intangible assets are stated at historic costs. Also, under the international rules, companies can gradually write off various costs, including development expenses to bring products to market, while U.S. companies must immediately charge such costs against profits. "This would be extraordinarily good news for us," says Francois Jaclot, a member of the executive board of Suez Lyonnaise des Eaux SA, the giant Franco-Belgian utility, which has said in the past it was looking into the possibility of a New York listing. "We are totally favorable [to a shift toward international accounting standards] because the effort to recast our books to U.S. accounting rules is huge and extremely costly." The international rules have picked up powerful backing. China, Australia and about 50 other countries, most of which have less-stringent home-country standards than the U.S., have already embraced the international rules, as have numerous central banks around the world. The New York Stock Exchange, too, has heartily welcomed the international rules. The Big Board stands to make a great deal of money from the listings of foreign companies. Former treasury secretary Robert Rubin and Federal Reserve Chairman Alan Greenspan have both backed seamless accounting world-wide, as poor accounting and disclosure practices were partly to blame for economic meltdowns in Brazil, Russia and the Asia-Pacific region. To be sure, the international standards don't have many accounting or auditing disciplines built up around them compared with the U.S. rules. Plus, there are very few SEC-type enforcers overseas to crack down on accounting flim-flams and poor accounting practices; many of these issues have been left up to foreign central banks to handle. One thing remains to be seen: Given the paucity of accounting enforcement overseas, will the cash-strapped SEC be required to enforce international accounting standards?"