.James Kroeker told
an accountants’ conference in Washington, DC that
the SEC would not be in a position in 2011, as scheduled, to
decide whether or not the US should adopt IFRS because the
convergence agenda of the Financial Accounting Standards Board
(FASB), a US body, and the International Accounting Standards
Board (IASB) was running late.
The SEC's chief accountant said that his organisation had made
in February 2010 that completion of the convergence
projects was a criteria in its consideration of IFRS. The IASB
website states that 20
jurisdictions, including Australia, Canada, China and the EU,
around the world either require the use of the international
standards or will do so soon.
Kroeker commended FASB and IASB for listening to those who
advised them that more time was needed for the convergence
agenda to be completed.
"The Boards, wisely in my view, also agreed that a number of
projects would be delayed even further to allow for a sharper
focus on a smaller number of key MOU projects and to allow for
a phased approach to the issuance of exposure drafts and the
resulting final standards.
"Success in this endeavor should and will be measured not by
the precise timing of completion of any of the given projects,
nor should it be measured by whether the timing was delayed to
provide for a phased approach to issuance of an exposure draft.
Instead of focusing on a few additional sands of time, I
believe success should be, and ultimately will be, measured by
the quality of the resulting output."
Kroeker explained that the boards had made progress. For
example, convergence standards had been agreed this year on
increased transparency related to items reported in Other
Comprehensive Income and how fair value should be determined
for financial reporting purposes, and similar standards on
revenue and leasing were getting closer. However, he said it
was not possible to say when the financial instruments project,
which has run into difficulties over an impairment model, would
be completed. Hedging and offsetting are other topics under
discussion for convergence.
Staff from the SEC are completing a work plan to set out how
the commission could and should go forward with making a
decision on IFRS.
"The staff will need a measure of a few additional months
time to produce a final report. At the same time, the staff is
in the process of developing an approach for Commission
consideration," Kroeker said, adding that a framework for
- Demonstrate a high level of support for US commitment to
continued development and use of global consistent high
quality accounting standards;
- Provide both in fact and in substantive operation clear
US authority over standards applicable in the US capital
- Provide for and facilitate a strong US voice in the
process of establishing global accounting standards;
- Be responsive to the economic and other impacts of
- Consider whether to retain US GAAP as the basis for US
financial reporting, thereby mitigating the costs and
complexity of introducing a new set of standards under
regulatory regimes, contractual documents, and U.S. laws
under which compliance with US GAAP is often specifically