United States SEC to consider hybrid model for IFRS adoption?
09 Dec 2010
Paul A. Beswick (Deputy Chief Accountant, United States Securities Exchange Commission) has revealed a possible approach for adoption of IFRS in the United States. Providing his personal views while speaking at the AICPA National Conference in Washington, D.C., Mr Beswick coined the term 'condorsement' to refer to a possible hybrid model to adopting IFRSs in the United States.
An extract from the published text of the speech is reproduced below:
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"... While I am a supporter of the objective of a single set of high-quality accounting standards in concept, I have not reached a conclusion on whether, and how, the U.S. capital markets should move to IFRS. So what would be a reasonable approach for the U.S.? In our October update we highlighted that the majority of jurisdictions are following either a convergence or an endorsement approach. In my opinion, if the U.S. were to move to IFRS, somewhere in between could be the right approach. I will call it a "condorsement" approach.... So how would this approach work? Well, to begin, U.S. GAAP would continue to exist. The IASB and the FASB would finish the major projects in their MOU. The FASB would not begin work on any major new projects in the normal course. Rather, a new set of priorities would be established where the FASB would work to converge existing U.S. GAAP to IFRS over a period of time for standards that are not on the IASB's agenda. At the same time, the FASB would have a process where they would consider new standards issued by the IASB for incorporation into U.S. GAAP and then integrate such standards into the U.S. codification. The ideal would be to incorporate such standards as issued by the IASB without modification. However, criteria would need to be established for FASB's consideration of endorsing or incorporating standards... In any case let me reiterate that all I have done is I've outlined an idea." |
Mr Beswick also discussed the costs of a "big bang" approach to adopting a new accounting framework (such as IFRS), the impacts on various categories of companies and the need for the IASB and FASB to focus on producing high-quality accounting standards as opposed to meeting deadlines. The full text of the published speech can be found here (link to SEC website).
