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 permitted but not required; and (iii) China, which intends to fully converge at some undefined future date.
In 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. The staff found little support for adopting IFRS as authoritative guidance in the US. However, the staff did find substantial support for exploring other methods of incorporating IFRS that demonstrate a US commitment to the objective of a single set of high-quality, global accounting standards.
Even though a mandatory change to IFRS for US public companies is not expected for the foreseeable future, 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 in January 2017, the outgoing SEC Chair expressed support for the development of high-quality, globally accepted accounting standards, and suggested that the SEC support further efforts by the FASB and IASB to converge their accounting standards to enhance the quality and comparability of financial reporting. Separately, the SEC is still discussing the possibility of allowing domestic issuers to voluntarily submit IFRS financial information, without reconciliation, in addition to their US GAAP financial statements.
This podcast will give you an overview of the similarities and differences between some of the newer US GAAP and IFRS accounting standards. While there are a number of similarities and differences between the two frameworks, this episode will focus on the three major accounting areas where the FASB and the IASB have issued new guidance in the last few years -- leases, financial instruments and revenue recognition.