IFRS in the US
After months of anticipation, in July the SEC staff issued its final staff report on its IFRS “Work Plan.” The report was not intended to be the final say on IFRS in the United States, but those looking for clarity on the path forward were disappointed. The report did not include a recommendation on whether, when, or how IFRS should be incorporated into the U.S. financial reporting system, nor did it provide an action plan on next steps toward a decision on IFRS or discuss a voluntary-adoption option. Notably, the SEC staff found little support in the United States for an outright adoption of IFRS. However, the SEC staff did find substantial support for exploring other methods of incorporating IFRS.
Latest developments
Although the final report on the Work Plan did not provide details as to next steps, it does represent an important milestone and the culmination of more than two years of effort by the SEC staff to complete a comprehensive study of IFRS. The IFRS Foundation Staff recently issued a response to the Work Plan, summarized in the In brief 2012-47 below.
Discussions in the U.S. have recently focused on one method of incorporating IFRS − through an active FASB potentially endorsing new and existing international accounting standards. This would merge IFRS into U.S. GAAP over a period of years, making the two sets of standards more similar, if not substantially the same.
The United States may not be adopting IFRS in the near future, but don’t lose sight of the significant accounting changes closing in for U.S. companies. The FASB and IASB continue to work toward finalizing accounting standards on revenue, leasing, and financial instruments. These standards will affect virtually all companies, whether they report under U.S. GAAP or IFRS.
- For companies involved in cross-border M&A activity, the structure of deals with non-US counterparties may be influenced by those counterparties' interest in IFRS accounting outcomes.
- The end result of many cross-border transactions involve investments in US companies by non-US stakeholders who require ongoing IFRS reporting.
- IFRS accounting requirements remain an ongoing focus for those companies who have subsidiaries outside of the US.
The FASB and IASB also continue to work toward finalizing accounting standards on revenue, leasing, and financial instruments. These standards will affect virtually all companies, whether they report under U.S. GAAP or IFRS.
What's next
The SEC staff’s report suggests there’s more work to do before the SEC makes a final decision about IFRS. What’s not clear is exactly what is left to do and when. Given everything else on the SEC’s plate, the Presidential elections, anticipated leadership changes at the regulator and standard-setter, and the current lack of political or business mandates for a near-term move to IFRS, we expect the timing of any additional activity to extend beyond 2012. For more details of the findings in the report, see Dataline 2012-06.
PwC video perspectives on IFRS
12/17/12 | US GAAP & IFRS ConvergenceIn this video series, PwC National Professional Services Group partners Wayne Carnall, David Schmid and Josh Paul discuss several key issues related to the adoption of IFRS in the US and provide PwC's perspective on the future and challenges associated with one set of globally accepted accounting guidelines. Read more
In brief
IFRS Foundation responds to SEC’s final report on IFRS Work Plan (No. 2012-47)
10/29/12 | Assurance services
IFRS news
IFRS news - May 20135/6/13 | Assurance services
PwC's monthly report shedding light on the IASB's activities. This edition looks at (1) integrated reporting - IIRC publishes consultation draft, (2) levies - IC to issue interpretation on accounting for levies, (3) insurers face change - update on the insurance contract, (4) recent activity at the IASB on ED on interim standard for regulatory deferral accounts, new Chairman of FASB, EU endorsement of amendments to IFRS 10, 11 and 12, and (5) know your IFRS 'ABC': ‘F’ for fair value.
In brief
In brief: Lease accounting proposal expected by mid-May 2013; alternative views expressed (No. 2013-19)4/11/13 | Assurance services
The FASB met on April 10, 2013 to discuss the costs, benefits, and complexity associated with the proposed lease accounting rules. The FASB members expressed their individual points of view and voted 4 to 3 in favor of moving forward with the revised exposure draft. The FASB and IASB expect to issue a joint exposure draft in mid-May 2013. This In brief article provides an overview of the decisions reached at the FASB meeting.
IFRS news
IFRS news - April 20134/8/13 | Assurance services
PwC's monthly report shedding light on the IASB's activities. This edition looks at (1) Impairment of financial instruments - IASB publishes exposure draft, (2) Discount rates and IAS 19 - IC debates the meaning of 'high quality' and 'deep market', (3) IFRS for SMEs - post implementation feedback, (4) recent activity at the IASB on IAS 19R employee contributions exposure draft, conceptual framework discussions, early adoption of revenue standard, request for information on rate regulation, IASB work plan update, ASAF membership; and (5) know your IFRS 'ABC': ‘E’ for equity accounting.
In brief
In brief: FASB issues Q&A and extends comment period for credit impairment proposal (No. 2013-16)3/28/13 | Assurance services
On March 25, the FASB issued a document that addresses key questions about its proposed impairment model for financial assets. In addition, the FASB reached a decision at its March 28 meeting to extend the comment period for its impairment proposal to May 31, 2013.
Quarter close
The quarter close — First quarter 2013: Publication and new video perspectives3/18/13 | Assurance services
This edition of The quarter close highlights current developments in financial reporting, including key standard-setting developments in revenue, financial instruments, and other hot topics, as well as SEC and PCAOB regulatory updates.
Corporate Governance Series
Shareholder questions: considerations for 2013 annual meetings3/18/13 | Assurance services
This PwC publication is intended to help management and the board of directors of public companies prepare for the annual meeting of shareholders. It contains example questions on topics that may be top-of-mind for shareholders, along with background information and suggested actions for management’s consideration.
In brief
In brief: Boards decide on scope of revenue recognition standard and other matters (No. 2013-03)1/31/13 | Assurance services
The FASB and IASB (the “boards”) decided at their January meeting to clarify the scope of the revenue standard, and they confirmed the accounting for repurchase agreements and performance fees by asset managers. They also confirmed that the accounting for transfers of non-financial assets that are not an output of an entity's ordinary activities should follow the guidance in the revenue recognition standard. This In brief article provides an overview of the boards' decisions and what's next.
In brief
In brief: Boards conclude redeliberations on key revenue measurement and recognition issues (No. 2012-58)12/18/12 | Assurance services
The FASB and IASB reached decisions at their December meeting on allocating the transaction price to separate performance obligations, applying the proposed model to bundled arrangements, constraining the cumulative amount of revenue recognized on licenses, and accounting for contract acquisition costs. The boards’ decisions are tentative and subject to change. This In brief article provides an overview of the boards' decisions and what's next.
- PwC video perspectives on IFRS
12/17/12 | US GAAP & IFRS Convergence
In these videos, PwC partners discuss several key issues related to the adoption of IFRS in the US.
Quarter close
The quarter close — Fourth quarter 2012: Publication and new video perspectives12/12/12 | Assurance services
This edition of The quarter close has the latest updates and timely reminders to help you navigate your year-end reporting process with a number of hot topics, including fair value, asset impairments, pensions, valuation allowances, and more.
In brief
In brief: IASB proposes limited amendments to its financial instruments guidance under IFRS 9 (No. 2012-55)11/29/12 | Assurance services
This week, the IASB issued its exposure draft proposing limited amendments to IFRS 9 (2010), Financial instruments. The proposed amendments are intended to: (1) Address application issues that have arisen since the original issuance of IFRS 9 with regard to financial assets measured at amortized cost, (2) Consider the interaction with the IASB’s insurance project, and (3) Reduce differences between IFRS 9 and the FASB’s proposed classification and measurement approach. This In brief article provides an overview of the IASB's proposed amendments and what's next.
In brief
In brief: IFRS Foundation responds to SEC’s final report on IFRS Work Plan (No. 2012-47)10/29/12 | Assurance services
On October 23, 2012, the IFRS Foundation (the organization that oversees the IASB) published a response (the "Foundation Staff response") to the SEC’s final report on its IFRS Work Plan (the "SEC Staff report") issued in July 2012. The Foundation Staff response is an assessment of the matters discussed in the SEC Staff report, including the operations of the IFRS Foundation and the IASB, the use of IFRS as global accounting standards, and issues related to incorporating IFRS into the US financial reporting system. This In brief article provides an overview of the Foundation Staff response.
- IFRS pocket guide
10/23/12 | Global accounting consulting services
PwC's IFRS Pocket guide 2012 provides a summary of the recognition and measurement requirements in International Financial Reporting Standards.
- IFRS and US GAAP: similarities and differences - 2012 update
10/18/12 | Assurance services
While the near-term use of IFRS in the US by public companies will not be required, IFRS remains and is becoming increasingly relevant to many US businesses. Companies will be affected by IFRS at different times and to a different degree, depending on factors such as size, industry, geography, M&A activity, and global expansion plans. To assist companies in understanding the current IFRS and US GAAP differences and the potential implications thereof, PwC has issued an updated edition of our popular guide, IFRS and US GAAP: similarities and differences.
Quarter close
The quarter close — Third quarter 2012: Publication and new video perspectives now available9/17/12 | Assurance services
This edition of The quarter close highlights the SEC report on IFRS, the latest on conflict minerals, health care reform, and several FASB releases that are sure to keep you busy this fall. Video perspectives are also now available.
Dataline
Dataline: SEC Staff releases its final report on its IFRS Work Plan (No. 2012-06)8/8/12 | Assurance services
The SEC Staff recently published its final Staff Report regarding the potential impact of incorporation of IFRS into the US financial reporting system. This Dataline looks at the six key areas covered in the Staff Report and offers our observations.
In brief
In brief: SEC Staff releases final report on its IFRS Work Plan (No. 2012-25)7/16/12 | Assurance services
Read this update on the SEC staff's July 2013 final report on its IFRS Work Plan, from PwC's CFOdirect Network
- Issues and solutions for the retail and consumer goods industries
5/15/12 | Retail & consumer
This report discusses accounting topics common to retail and consumer companies. Issues covered range from those related to R&D all the way through to sales to the end customer. Each discussion provides background, accounting guidance, a solution and a comparison between US GAAP and IFRS.
Dataline
Dataline: SEC Staff continue progress on IFRS work plan -- Comparison between IFRS and US GAAP frameworks and analysis of IFRS in practice (No. 2011-36)12/6/11 | Assurance services
On November 16, 2011, the SEC's Office of the Chief Accountant (the SEC Staff) published two staff papers. The first summarizes differences between the US GAAP and IFRS frameworks, and the second analyzes how IFRS is applied in practice. The papers were published pursuant to the SEC StaffÆs work plan to analyze considerations relevant to the Commission's decision on whether, when, and how IFRS might be incorporated into the US financial reporting system. This Dataline provides a summary of selected differences between US GAAP and IFRS noted in the first paper. It also summarizes the Staff's key observations included in the second paper on how IFRS is applied in practice. ...
Point of view
Point of view: The path forward for international standards in the United States: Considering possible alternatives10/6/11 | Assurance services
The SEC announced plans for the future use of international financial reporting standards (IFRS) by US public companies. Completion of the current convergence agenda, enhanced cooperation among capital market securities regulators, and a refocused international interpretations body will provide a basis for a single set of high-quality global accounting standards.
PwC comment letter (SEC)
PwC Comments on SEC Staff Paper: Exploring a Possible Method of Incorporation of IFRS8/4/11 | Assurance services
PwC commends the SEC staff for their continued, thorough evaluation of whether, when and how IFRS should be incorporated into the US financial reporting system. PwC continues to support a vision of a single set of high-quality, global accounting standards that are consistently applied, and the Firm believes that IFRS provides the best basis for achieving this vision. In PwC's opinion, further improvements are still required in the quality of accounting standards and more work is required by standard setters, preparers, auditors, and key capital market securities regulators to improve the consistency of IFRS application. PwC also believes that the endorsement approach described in the staff paper is a fair starting point from which to...
Tax accounting insights
IFRS, the current landscape for US tax executives1/9/11 | Tax accounting services
The potential transition to IFRS in the United States has been an ongoing focus of the SEC over the past several years. As part of their current workplan, the SEC is analyzing the impact of IFRS on US issuers and whether, when, and how to incorporate IFRS into the US financial reporting system. In this Tax accounting insights, we inform US tax executives on the current landscape of IFRS, including the key tax considerations that may arise in the near-term
Tax accounting insights
Stock option awards under IFRS: Tax accounting impacts earnings7/7/08 | Tax accounting services
PwC analysis of the potential impact of IFRS on shared-payment stock plans. An IFRS conversion may affect cash taxes and affect financial reporting systems and processes.