IFRS in the US

Many 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 US, 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; and (iii) China, which intends to fully converge at some undefined future date.

 

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Key developments in IFRS in the US

In July 2012, the SEC issued its final report on its IFRS work plan intended to aid the SEC in evaluating the implications of incorporating IFRS into the US reporting system. There was no recommendation from staff on whether, when or how IFRS may be incorporated in US financial reporting system.

The staff found little support for adopting IFRS as authoritative guidance in the US, and outright adoption would not be consistent with the method of incorporation followed by other major capital markets.

The discussion about the use of IFRS in the US continues. At the AICPA National Conference on Current SEC and PCAOB Developments in December 2016, the Chief Accountant of the SEC’s Office of the Chief Accountant, Wes Bricker, indicated that although he does not foresee the use of IFRS for domestic registrants in the foreseeable future, he encouraged the FASB and IASB to work together to eliminate differences when in the best interest of capital markets. Similarly, in a public statement issued on January 5, 2017, former SEC Chair Mary Jo White expressed support toward the development of high-quality, globally accepted accounting standards, and suggested that the SEC support further efforts by the FASB and IASB on convergence between their accounting standards to enhance the quality and comparability of financial reporting. Separately, a prior year suggestion to allow domestic issuers to voluntarily submit IFRS financial information, without reconciliation, in addition to their US GAAP financial statements is still being discussed.

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