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US Progress Toward IFRS

On December 5, 2011, SEC Chief Accountant James Kroeker indicated to the AICPA that the SEC had delayed its decision concerning a potential US switch to IFRS. Previous comments by the SEC had introduced the term “condorsement” (“convergence” crossed with “endorsement”) and the possibility that the United States would retain US GAAP but gradually incorporate current and existing IFRS rules.

On Monday, February 20, Mr. Kroeker addressed an IFRS advisory panel in London.  In remarks that recalled the previous SEC comments, Mr, Kroeker hinted that he and his staff were gravitating toward a middle-ground “endorsement” proposal, under which IFRS would be incorporated into US rules and US rule makers would retain the authority to evaluate future global rules for US use.  He said that the rules to be used globally “would be the standards of the IASB,” and that the FASB would play an endorsing role.  The FASB could decide not to apply an IASB rule that does not improve financial reporting for US investors.

Mr. Kroeker also indicated his intent to make a proposal to the SEC commissioners in the coming months on how the United States could switch to global accounting standards.  After he makes his proposal, the commissioners will likely hold public meetings before a vote, perhaps later this year.  Any US adoption would likely take place over several years.

Click here for Reuters news story on this topic.