SEC's Kroeker Questions IFRS 'Option;' Staff Reports on IFRS Coming

Posted by accountingweb on Nov 15 2011 1114 printer friendly

In remarks at FEI’s Current Financial Reporting Issues (CFRI) conference earlier today, SEC Chief Accountant Jim Kroeker, appeared to indicate he would personally question whether to offer an ‘option’ for U.S. public companies to report in IFRS, vs. a firm requirement to do so over a transition period, if the SEC were to move in that direction.

Note 1: this was my take on one point raised by Kroeker; see disclaimer posted on the right side of this blog, read his verbatim quote below. Note 2: my use of the phrase 'report in IFRS' may be an overly short-hand reference, since the more recent thinking of the SEC, as discussed in its Staff Paper on 'Condorsement' released in May 2011, focuses on the incorporation of IFRS into the U.S. financial reporting system via ongoing endorsement of IFRS by the FASB, and that concept, combined with comments filed with the SEC today by the Financial Accounting Foundation (which oversees the FASB) may - the operative term being, may - indicate a more gradual move to 'incorporating' IFRS into U.S. GAAP, perhaps lessening the potential impact of an on-off 'switch' from U.S. GAAP to IFRS.

Objective of Global Standards ‘Isn’t to Engrain Dual GAAP System”

Kroeker noted that while some smaller companies participating in an SEC roundtable on IFRS earlier this year indicated they would find it advantageous to report in IFRS (e.g. if they already had to report IFRS for purposes of consolidation), others indicated there would be no potential benefit to them, and some asked the SEC to offer an option to report in IFRS, but not strictly require IFRS. He added those companies seemed to favor an option - not so they could take up the option - but so they would never have to report using IFRS.

Noting the SEC’s longstanding support of moving toward a set of global accounting standards, including as expressed in the Commission’s February, 2010 Statement, Kroeker said

“The objective isn’t to engrain a dual GAAP system, at least not from my perspective.”

Several SEC Staff Reports on IFRS Coming

Kroeker reviewed developments to date with respect to the SEC’s consideration of incorporating IFRS in the U.S. financial reporting system, and announced that the SEC staff plans to issue a number of reports, some in the “very near term,” relating to this subject. Read details on the upcoming SEC reports on IFRS, here.

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