The Securities and Exchange Commission will delay its eagerly anticipated decision for a few more months on whether or not to incorporate International Financial Reporting Standards into the U.S. financial reporting system.
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SEC Chief Accountant James Kroeker told an audience at the American Institute of CPAs’ National Conference on Current SEC and PCAOB Developments on Monday that his staff will “take a measure of a few additional months” to finish its work plan. The SEC commissioners are awaiting the completion of the work plan before making their decision, which had been expected by the end of this year.
Last month, the SEC staff released two documents that had been part of their work plan describing the remaining differences between U.S. GAAP and IFRS and examining the variations in the way IFRS was applied by various foreign companies whose financial statements had been filed with the SEC (see SEC Releases Long-Awaited IFRS Comparison Papers). Kroeker noted that the Financial Accounting Standards Board and the International Accounting Standards Board are also behind in their schedule for completing their major convergence projects, such as financial instruments.
“The boards are not aligned as it relates to their approaches to consider hedge accounting in the context of their financial instruments project,” Kroeker said, according to Compliance Week. “Numerous conceptual operational and practical questions [have been] raised about the proposal to date that I believe should be considered by both boards jointly.”
However, Kroeker sounded a hopeful note. “I’m encouraged for the prospect of incorporation of IFRS,” Kroeker said, according to Reuters. “A grain of sand passing in the hourglass is nothing compared to establishing a strong and lasting framework.”