SEC Trends & Developments - Spring 2013 - IFRS – An Update
Shelly Luisi, a senior associate chief accountant with the SEC, said in a recent meeting “While we don’t have a current workflow in terms of working toward a commission document, we do continue to do outreach and we meet consistently with professional groups.” She also said “We are always gathering the views of constituents regarding the U.S. going IFRS in some way or incorporating IFRS into our environment.”
While the FASB and the International Accounting Standards Board have been working together since 2002 to achieve convergence of IFRS and U.S. GAAP, it appears that a common set of high quality global accounting standards remains far away. In fact, it is no longer clear that the SEC will recommend the adoption of IFRS for U.S. public companies. In July of 2012, the SEC released the final installment of a series of staff reports on IFRS. While the report concluded that the standards of the IASB were of a high quality, it questioned the funding of the IASB and the timeliness of responses to accounting issues and stated adoption would be costly for U.S. public companies.
In his opening remarks at last year’s AICPA Conference on SEC and PCAOB Developments, current IASB Chairman Hans Hoogervorst said “We really need a tangible sign of continued U.S. commitment to a single set of global standards. Merely striving for greater comparability between standards will not do.” Mr. Hoogervorst also expressed his view of the SEC’s progress toward IFRS and acknowledged that many differences still remain between the two sets of standards. “In my speech to you last year, I recognized that it would not be an easy task for the SEC to make up its mind about adoption of IFRS. I was not so naïve to expect wholesale adoption of IFRS for all companies from day one. But there was a reasonable expectation around the world that the SEC would plot a course towards IFRS.”
Currently, the SEC allows over 400 multinational companies based abroad to file their financial reports in IFRS and several years ago dropped the requirement for them to reconcile it with U.S. GAAP.
As a sign of things to come, it was recently announced that the FASB would join the newly formed Accounting Standards Advisory Forum (“ASAF”). The ASAF will advise the IASB on international standards setting. “The FASB's membership on the ASAF is an opportunity for the FASB to represent U.S. interests in the IASB's standard-setting process and to continue the process of improving and converging U.S. GAAP and IFRS," said Jeffrey J. Diermeier, chairman of the Financial Accounting Foundation Board of Trustees.
SEC Trends & Developments - Spring 2013 - Issue
- IFRS – An Update
- MD&A and Footnote Disclosures – Where is the Line?
- National Examination Program 2013 Priorities
- Recent SEC Enforcement Actions
- Accounting Standards Update
- Latest Comments from the Commission
- Social Media Acceptable to SEC
- Reputational Risk is the Primary Concern of Boards of Directors According to Survey; Social Media Amplifies Risk