IFRS in the US

While the near-term use of IFRS in the US by domestic public companies will not be required, IFRS remains very relevant to many US businesses. Companies are and will be affected by IFRS at varying times and degrees of magnitude, driven by factors such as size, industry, geography, M&A activity, and global expansion. Despite an unclear SEC adoption timeline, we believe the impact of accounting changes resulting from the FASB's and IASB's joint efforts will be significant and will have broad based implications.

  • Most of the world’s capital markets now require IFRS, or some form thereof, for financial statements of public-interest entities. The remaining major capital markets without an IFRS mandate are (i) the U.S., with no current plans to change; (ii) Japan, where voluntary adoption is allowed, and while there is a Japanese government agenda item to expand use of IFRS in Japan, currently no mandatory transition date has been established; (iii) India, which announced in January 2015 its final roadmap requiring the use over the next several years of Indian accounting standards that are significantly converged with IFRS; and (iv) China, which intends to fully converge at some undefined future date.

  • The discussion about the use of IFRS in the U.S. continues. In recent public speeches, Chief Accountant of the SEC’s Office of the Chief Accountant, James Schnurr, discussed the potential for further incorporating IFRS into the U.S. capital markets by allowing domestic issuers to provide IFRS-based information as a supplement to U.S. GAAP financial statements without requiring reconciliation. He also noted that the SEC staff is currently developing a recommendation for the Commission that is intended to provide clarity to investors. Although Schnurr acknowledged that there is continued support for the objective of a single set of high–quality, globally accepted accounting standards, he indicated that there is little support for the SEC to provide an option allowing domestic companies to prepare their financial statements under IFRS, and there is virtually no support to have the SEC mandate IFRS for all companies. Finally, Schnurr indicated that he believed that, for the foreseeable future, continued collaboration among the IASB, the FASB, the IFRS Foundation (the trustees of the IASB), and the Financial Accounting Foundation (the trustees of the FASB) is the only realistic path to further the objective of a single set of high-quality, global accounting standards. Accordingly, he stated that how these entities decide to interact in the future is critical to this objective.

  • In the meantime, the FASB and the IASB continue to work together on some aspects of the remaining convergence project on leasing. We believe that the "era" of convergence is nearing an end as the boards shift attention to their individual agendas.    

  • Although the era of convergence is almost at an end, the impacts of the accounting changes resulting from the boards’ joint efforts have been significant, and the two accounting frameworks have moved closer together during this time (e.g., the new revenue guidance). Although the boards are no longer formally working together in most areas, differences between the two frameworks continue to be removed. A recent example is the U.S. GAAP change relating to the reporting of discontinued operations. The new guidance is now substantially aligned with IFRS.
  • Although a mandatory change to IFRS for U.S. public companies will not occur in the foreseeable future, IFRS is increasingly relevant to many U.S. companies, big and small, public and non-public, because of: (i) cross-border, M&A activity; (ii) the reporting needs of non-U.S. stakeholders; and (iii) the IFRS reporting requirements of non-U.S. subsidiaries. Being financially “bilingual” in the U.S. is increasingly important.

IFRS and US GAAP: similarities and differences - 2015 edition


This publication provides a broad understanding of the major differences between IFRS and US GAAP, as well as insight into the level of change on the horizon.

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IFRS news - November 2015


This issue of IFRS news looks at (1) proposed interpretation on foreign currency and advance consideration, (2) new interpretation on uncertainty over income tax treatments, (3) proposed practice statement on the application of materiality to financial statements, (4) leases, (5) update on IFRS 9 Impairment Transition Group, (6) financial instruments with the characteristics of equity, (7) disclosure initiative, (8) insurers and IFRS 9, (9) borrowing costs, (10) joint control, (10) definition of a business, and (11) IFRIC rejections in short — IAS 10.

IFRS news - October 2015


This issue of IFRS news looks at (1) highlights of September 2015 meeting of the TRG for impairment of financial instruments, (2) proposed deferral of amendments to IFRS 10 and IAS 28 for the sale or contribution of assets between an investor and its associate or joint venture, (2) fair value myths, (4) a summary of the IASB's recent decisions on Insurance contracts, the effective date for the new insurance standard and IFRS 9, and its disclosure initiative, and (7) recent issues IFRIC declined to take on related to IAS 8 on accounting policies, accounting changes, and errors.

Update on IFRS 15: Revenue recognition


PwC's Paul Feetham provides an update on the new revenue standard and the impact of the one year deferral.

IFRS news - September 2015


This issue of IFRS news looks at (1) impairment through the eyes of regulators, (2) IFRS research is separating the facts from the hype, (3) negative interest rates, not just for banks!, (4) Workplan 2016-2020, and (5) IFRS rejections in short – IAS 7.

IFRS and US GAAP: similarities and differences - 2015 edition


This PwC publication provides a broad understanding of the major differences between IFRS and US GAAP, as well as insight into the level of change on the horizon.

IFRS 9 - impairment for banking


PwC Assurance Partners Ryan Leopold and Chris Wood discuss the new financial instruments standard and how it impacts the banking industry.

IFRS news - July/August 2015


This issue of IFRS news includes the following topics: (1) proposed amendment to IFRS 15, Revenue recognition, (2) Exposure Draft proposing amendments to IAS 19 and IFRIC 14, Pension accounting, (3) TRG continues to debate implementation issues related to the new revenue standard, (4) Insurance and IFRS 9, (5) IFRS implementation issues, (6) Fair Value Measurement, (7) IFRS 3 post implementation review, (8) Financial Instruments with characteristics of equity, and (9) IFRIC rejections related to IAS 2.

IFRS news - June 2015


This issue of IFRS news looks at (1) IASB issues exposure draft Conceptual Framework exposure draft, (2) segment disclosures: results of IFRS 8 Post-Implementation Review project, (3) IFRS 9 Disclosures, (4) IFRS 15 clarifications, (5) disclosure initiative, (6) FICE research project, and (7) NIFRICs by numbers: IAS 1.

IFRS news - May 2015


This issue of IFRS news looks at (1) IASB propose to defer effective date of IFRS 15, (2) IASB research project gains steam, (3) Disclosure initiative, (4) Annual improvements, (5) Fair value of quoted instruments, and (4) Q&As: ‘Z’ is Zoos and IAS 41.

PwC comments on IASB's proposed amendments to share-based payment standard


In our letter, we explain our views on net settled awards, measurement of cash settled awards, and transition guidance.