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SEC Chief Accountant discusses convergence

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20 Jun 2011

James L. Kroeker, Chief Accountant of the United States Securities Exchange Commission (SEC) has provided comment on the IFRS-US GAAP convergence process being undertaken by the IASB and FASB (the 'Boards').

In a recent speech given to the University of Southern California SEC and Financial Reporting Institute Conference, Mr Kroeker emphasised the need for the Boards to have adequate time to develop fully converged standards.

An extract follows:

"I believe it is critical that, as it relates to the MOU projects, that the Boards take all reasonable steps to maximize the prospect of converged, high-quality solutions. For example, currently the Boards are not aligned as it relates to their approaches to consideration of hedge accounting in the context of their financial instruments project. Numerous conceptual, operational and practical questions have been raised based upon proposals to date that should be considered jointly by both Boards. I believe that , in the long run, a measure of added time to provide for joint deliberations on a project as critical and as complex as hedge accounting will prove to be far more beneficial than any gains that are perceived in finalizing deliberations individually.

In achieving high-quality, converged solutions, the Boards will inevitably be faced with difficult choices about how best to proceed. I continue to encourage the Boards to reconcile differences in the proposed standards and to work to reach converged and improved solutions to these difficult financial reporting issues. In monitoring the accounting standard-setting process, my focus tends to be on ensuring there is the appropriate balance between conceptual grounding and pragmatism in the standards being developed."

Click for full text of the speech (link to the SEC website).

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