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IFRS Foundation Trustees respond to SEC staff IFRS report

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Jul 15, 2012

The Trustees of the IFRS Foundation have issued a statement on the publication of a staff report representing the final element of the Work Plan developed by the SEC staff. The statement notes "regret" that the report is not accompanied by a recommended action plan by the SEC.

In the statement (link to the IASB's Web site), Michel Prada, chairman of the Trustees, noted:

For the benefit of both US and international stakeholders, the Trustees look forward to the SEC resolving the continued uncertainty regarding the US’s commitment to global accounting standards.

Mr. Prada acknowledges the challenges IFRSs transition may present to U.S. constituents but also notes these are challenges "that other jurisdictions have successfully overcome when completing their own transition to IFRSs."

The SEC staff report notes a number of matters in relation to the governance and activities of the IASB, including:

  • There are a number of areas for which IFRSs are underdeveloped, e.g., accounting for extractive industries, insurance, and rate-regulated industries.
  • The IFRS Interpretations Committee could do more to address issues on a timely basis.
  • The IASB should consider greater reliance on national standard setters.
  • Global application of IFRSs could be improved to narrow diversity.
  • Continued reliance on the large public accounting firms to provide funds to the IASB.

The SEC staff report acknowledges that the IFRS Foundation has recently undertaken recent reforms in many of these areas. In the Trustee's statement, Mr. Prada states:

The Trustees will carefully study the report in detail and take further steps as necessary. Our initial assessment is that many of the findings are broadly consistent with the conclusions of the Monitoring Board and Trustees’ respective Governance and Strategy Reviews completed earlier in the year, and are already addressed in the work plan for 2012.

The statement also includes comments from Hans Hoogervorst, chairman of the IASB. In accordance with recent speeches made by Mr. Hoogervorst, he notes the broad adoption of IFRSs already evident on a global basis, the calls by the G20 for global accounting standards, and the new agenda for the IASB going forward "as the era of convergence is coming to an end."

Click for IFRS Foundation Trustees statement (link to the IASB's Web site).

We will make a more detailed summary of the SEC report available soon on IAS Plus.

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