AICPA recommends optional adoption of IFRS by US public companies in comment letter to SEC

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18 Aug 2011

The American Institute of Certified Public Accountants (AICPA) has submitted a comment letter (link to AICPA website) to the US Securities and Exchange Commission (SEC) on its views of the SEC staff paper, Work Plan for the Consideration of Incorporating International Financial Reporting Standards Into the Financial Reporting System for U.S. Issuers Exploring a Possible Method of Incorporation.

The AICPA's comment letter expresses support of IFRS and the continued efforts of the IASB and FASB to develop a single set of financial reporting standards for public companies worldwide. The letter supports an "endorsement approach" similar to the one described in the SEC Staff Paper, and emphasises that US companies should be given an option to adopt IFRS, as long as they also remain compliant with US GAAP. See our earlier story for more information on the Staff Paper.

The letter includes the following opinions:

Whether or not the SEC decides to incorporate IFRS into the U.S. financial reporting system through an endorsement/convergence approach, we believe U.S. issuers should be given the option to adopt IFRS as issued by the IASB. An adoption option would provide a level of consistency in the treatment of U.S. companies and foreign private issuers that report under IFRS that does not exist today, and would facilitate the comparison of U.S. companies that elect IFRS with their non-U.S. competitors that use IFRS. Furthermore, giving U.S. companies an option to adopt IFRS as issued by the IASB would be another important step towards achieving the goal of incorporating IFRS into the U.S. financial reporting system. Anecdotal evidence suggests that the number of companies that would choose such an option would not be such that system-wide readiness would become an issue. . . .

We pragmatically accept the concept of an endorsement approach for the incorporation of IFRS into the U.S. financial reporting system and the retention of the Financial Accounting Standards Board (FASB) as the U.S. standard setter to facilitate the incorporation of IFRS into U.S. GAAP. . . .

[A]fter completion of the MoU priority projects, we recommend an endorsement process that would incorporate IFRSs not subject to standard setting into U.S. GAAP for public companies at one point in time, with a date certain for adoption. . . .

As it relates to private companies, we support the recommendations of the Blue Ribbon Panel on Private Company Financial Reporting for establishment of a separate board for developing exceptions and modifications to current U.S. GAAP for private companies.

The AICPA is also hosting jointly with the IFRS Foundation The North American Perspective IFRS Conference, which will include information on IFRS including major convergence projects and the status of incorporating IFRS into US financial reporting. The conference is scheduled to take place in Boston MA, United States on 5-7 October 2011. More information about the conference is available on the IASB's website.

Click for AICPA comment letter (link to AICPA website)

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