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SEC commissioner discusses option of using IFRSs in United States

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Nov 18, 2015

In a speech at the 34th Annual Current Financial Reporting Issues Conference in New York, SEC Commissioner Michael S. Piwowar commented on the potential option of allowing domestic issuers in the United States to provide IFRS-based information as a supplement to U.S. GAAP financial statements without requiring reconciliation.

The option was first suggested by SEC Chief Accountant Jim Schnurr at a financial reporting con­fer­ence in early December 2014. Mr. Schnurr and SEC Deputy Chief Accountant Julie Erhardt further discussed it at the annual AICPA Con­fer­ence on Current SEC and PCAOB De­vel­op­ments a week later.

In his speech, Com­mis­sioner Piwowar further described the option as follows:

It is difficult to gauge investor demand for financial reporting under IFRS by U.S. domestic issuers. How does one predict investor demand for IFRS reporting when it is largely not available in the domestic context? For instance, twenty years ago, it was difficult to predict the demand for “smart phones” when the product was not available to the general public. . . . Our chief ac­coun­tant has raised an in­ter­est­ing and in­cre­men­tal approach that should provide further insight as to whether there is investor demand for IFRS reporting. His idea — to allow, but not mandate, IFRS financial reporting as a sup­ple­ment without rec­on­cil­i­a­tion to GAAP — is worthy of serious con­sid­er­a­tion. . . . It would provide useful data on investor demand for us to analyze. Of course, the specific details would still need to be worked out, but I think — eleven months after the idea was first broached — that the Com­mis­sion should take this ad­di­tional step forward.

The full transcript of the speech is available on the SEC's Web site.

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