SEC Chief Accountant speaks on convergence

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18 Sep, 2015

At a conference of the American Institute of Certified Public Accountants (AICPA) in Washington, D.C., the Chief Accountant of the Securities and Exchange Commission (SEC), James Schnurr, discussed convergence and explained that he was "optimistic that I will be able to provide more clarity on the path forward in the next few months".

Mr Schnurr began his speech by discussing the IASB and FASB's converged standards on revenue recognition and the similar yet not converged requirements on credit impairment. In both cases he stressed the benefits of cooperation and of learning from each other and from the implementation of the new standards. He then turned to the topic of IFRSs and convergence itself. He reiterated his assessment of the situation and reminded the audience of the findings he had presented at a financial reporting conference at Baruch College in New York City in May this year. He also stated that he was still discussing the "fourth option" (allow, but not require, domestic issuers to provide supplementary IFRS based information), which he had first introduced in December 2014, with the SEC Commissioners. For the time being, however, he believed that continued collaboration was the only realistic path to further the objective of a single set of high-quality, global accounting standards:

In my opinion, in the near term, the FASB and IASB should continue to focus on converging the standards. The boards should renew their commitment to cooperate and develop standards that eliminate differences between IFRS and U.S. GAAP whenever it meets the needs of its constituents and improves the quality of financial reporting. I recognize the boards will not always be able to eliminate differences during the standard-setting process, primarily because they serve different constituents that have different needs. However, when differences in standards arise, the boards should monitor the implementation of those standards with the objective of learning from the implementation and re-engaging with each other with the goal of converging to the standard with the highest quality financial reporting outcome.

Please click to access the full text of Mr Schnurr's speech on the SEC website.

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