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SEC chief accountant speaks on convergence

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Sep 18, 2015

At an AICPA conference in Washington, D.C., SEC Chief Accountant James Schnurr discussed convergence and said that he was "optimistic that [he would] be able to provide more clarity on the path forward in the next few months."

Mr. Schnurr began his speech by dis­cussing the IASB’s and FASB's converged revenue recog­ni­tion standard and their similar but not converged credit impairment re­quire­ments. In both cases, he stressed the benefits of co­op­er­a­tion and of learning from each other and from the im­ple­men­ta­tion of the new standards. Mr. Schnurr 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, Mr. Schnurr believes that continued col­lab­o­ra­tion is the only realistic path toward furthering 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.

The full text of Mr Schnurr's speech is available on the SEC's Web site.

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