earlier today at the AICPA's annual conference on current SEC and PCAOB developments, SEC Chief Accountant Jim Kroeker said, "implementing a single set of global accounting standards for U.S. issuers can, and must, be done only in a manner that is beneficial to U.S. capital markets and consistent with the SEC's mission of protecting investors."
Kroeker outlined six general areas that the SEC would have to "carefully consider...fully understand and address" regarding the potential use of IFRS by U.S. companies. He added that this list is not all-inclusive. The six areas are:
- U.S. Investor understanding of and perspectives on IFRS;
- The development and application of IFRS for use as the single set of globally accepted accounting standards for U.S. issuers;
- The impact on the U.S. regulatory environment;
- Preparer considerations, including, among other matters:
- changes to accounting systems,
- changes to contractual agreements,
- corporate governance considerations, and
- litigation contingencies;
- Human capital readiness; and
- The role of the FASB in achieving the goal of a single global standard.
Kroeker noted, "I expect that you will hear more from us on this topic in the near term."
My two cents (I remind you of the disclaimer on the right side of this blog
): For those self-appointed "IFRS Watchmen" watching and weighing every utterance coming from the SEC on the status of its proposed IFRS roadmap, most will probably view Kroeker's reference to more info coming in the "near term" as further testimony to the fact that something more definitive is expected from the SEC "this fall" regarding the status of its IFRS roadmap, to use the terminolgy previously used in remarks by SEC Chairman Mary L. Schapiro (as noted in Sept. 18 Dow Jones article),
and by Kroeker in an number of speeches earlier this year.
It will be interesting to see if the six areas outlined by Kroeker in his remarks to the AICPA today will form the general outline of the SEC's 'next steps' for its IFRS roadmap. Although he did not use the term 'next steps,' the term has been used in previous speeches, such as in remarks by SEC Commissioner Kathleen Casey
at an FEI conference last month when she said: "It is also my hope and expectation that the Commission will soon articulate the next steps
to be taken with respect to the use of IFRS by U.S. issuers – further signaling our commitment to this important goal."
Separately, Prof. David Albrecht has indexed some writings on IFRS in his blog, The Summa
. At the present time, he notes his posts include everything he's written on the issue, and a summary of some opposing
arguments to a move to IFRS. "Yet to write," says Albrecht: "Comparing and Evaluating Both
Sides of the IFRS Issue."Search is On For Next Chair Of IASB, And What About FASB?
In related news on the IFRS front, the International Accounting Standards Committee Foundation (IASCF), parent of the IASB, issued a press release
earlier today announcing: "Trustees Seek Nominations for Chair of IASB From 2011." Current IASB Chair, Sir David Tweedie's term, ends on June 30, 2011. (Coincidentially, that is the date by which the G-20 leaders, at their September meeting, called for the FASB and IASB's major convergence projects to be completed by; and FASB and the IASB, in a November joint statement, reaffirmed their commitment to achieving that goal.)
Up until now, the forthcoming changing of the guard at the IASB has been a sleeper issue, at least in the U.S..
However, the potentially bigger sleeper issue in the U.S. is the fact that FASB Chairman Robert Herz'
term as chairman of the FASB is currently set to expire on June 30, 2012. In fact. only one of the current board members currently has a term extending past 2012, although a number of board members could potentially be reappointed to a second term (Tom Linsmeier, Larry Smith, Mark Siegel) after their first terms expire. Herz and Leslie Seidman are serving their second terms on the board.
My two cents (does that make four cents today?) (I remind you once more of the disclaimer on the side of this blog
): I cannot recall if any FASB board member has ever been reappointed to a third consecutive term, nor do I know if that is permissible under their Rules of Procedure, but there may be some merit to permitting a reappointment to a third term if warranted, given the massive amount of change coming down the pike with the completion of the major convergence projects, initial implementation of those changes, the potential move to IFRS for public co's in the U.S., and looming questions about the future of financial reporting for private companies in the U.S., as noted in our post last week re: private co's.
Of course, as noted in point #6 of the SEC Chief Accountant's remarks at the AICPA conference earlier today, "the role of FASB in achieving the goal of a single global standard" is still something to be reckoned with, and that will particularly be the case in the post-2011 (presumably 'converged') world.
In this regard, it is interest to look back at an earlier post in this blog from Dec. 11, 2007, entitled: "FASB Could Become Part of IASB, Herz Reportedly Tells IFAC Conference; SEC To Meet Next Week." Here's what our post from Dec. 11, 2007 said:
There’s been a flurry of reporting on FASB Chairman Bob Herz’ remarks at the International Federation of Accountants (IFAC) 30th anniversary World Accountancy Forum earlier this week, in which Herz is reported to have said that in light of the move toward one global standard setter – and, as he has previously stated, that one global standard setter will one day be the IASB - FASB can essentially become a branch or satellite office of the IASB. This was reported in FASB Sees Its Future as Part of IASB,” Accountancy Age, Dec. 7, “FASB Could Become Branch of IASB,” Webcpa, Dec. 6, and “FASB Members Suggest board Could Become IASB ‘Satellite’ or U.S. Office,” BNA Daily Report for Executives, Dec. 7.The BNA article notes not only Herz remarks at IFAC on Dec. 4, but similar remarks by FASB board member Michael Crooch at yesterday’s (Dec. 6) FASB Accounting Standards Advisory Council (FASAC) meeting.
BNA describes Herz' remarks at IFAC as “suggest[ing] IASB could have an office ‘in the United States – maybe in Norwalk [Conn.]’ for example, and it ‘might have an office in Japan.’ BNA also notes Crooch told FASAC yesterday: “At some point, the FASB is going to have to be out of the business of writing accounting standards, if you’re going to have one global standard-setter.”