July 2010
»
The Journey Toward IFRS in the...
Full articles of The CPA Journal are available to NYSSCPA members and CPAJ subscribers ONLY. Please login to access this content.
Nonmembers and nonsubscribers, you can apply for NYSSCPA Membership here and get unlimited access to The CPA Journal, or you can create a non-member online account here and purchase individual articles.
The Journey Toward IFRS in the United States
Robert P. Derstine, PhD, CPA, and Wayne G. Bremser, PhD, CPA
For the past several years, the United States has been on a journey toward the adoption of International Financial Reporting Standards (IFRS). In 2000, the SEC issued a concept release on international accounting standards and sought comments. FASB and the International Accounting Standards Board (IASB) initiated a convergence process in 2002. Their stated objective has been the development of common, high-quality standards with the ultimate goal of a single set of high-quality global accounting standards. There are many advocates for the U.S. adoption of IFRS for public companies, including the AICPA, many state CPA societies, and international and multinational accounting firms. Financial publications have featured such headlines as “The Train Has Already Left the Station,” “It's a Done Deal,” and “Ready or Not, Here Comes IFRS.” In November 2008, the SEC issued a proposed road map to a single set of globally accepted accounting standards. Subsequently, opposition to the perceived too-rapid adoption of IFRS has been more vocal. Another recent milestone in the journey was reached in the February 24, 2010, “SEC Statement in Support of Convergence and Global Accounting,” providing an update and continued support for the convergence of U.S. GAAP and IFRS (www.sec.gov/ rules/other/2010/33-9109.pdf). The SEC convergence statement outlined a work plan aimed at putting the commission in a position in 2011 to make a decision on using IFRS in the U.S. domestic reporting system. The SEC indicated that completion of FASB and IASB convergence projects according to the current work plan is a key factor. Convergence projects on leases, financial instruments, consolidation, derecognition, financial instruments with equity characteristics, fair value measurement, revenue recognition, and financial statement presentation are currently scheduled for completion by the second quarter of 2011. These are challenging accounting issues. If FASB and the IASB can succeed on schedule, it would be a major step forward.