December 5, 2016
The Securities and Exchange Commission won’t switch to International Financial Reporting Standards in the near term, but will continue reviewing a proposal to allow IFRS information to supplement U.S. financial filings, said Chief Accountant Wesley Bricker.
The SEC has been mulling for years whether to switch U.S. companies over to using IFRS instead of generally accepted accounting principles, the U.S. rules set by the Financial Accounting Standards Board, or FASB. But those efforts have stalled, and in 2015 James Schnurr, then the SEC’s chief accountant, instead raised the possibility of allowing companies to supplement their main GAAP numbers with information prepared under IFRS.
The effort amounts to a compromise proposal – Mr. Schnurr has said most U.S. companies opposed switching to the international standards.
Mr. Bricker, who took over as chief accountant from Mr. Schnurr last month, signaled he would maintain these policies.
“I believe that at least for the foreseeable future, the FASB independent standard setting process and U.S. GAAP standards will be in the best interests of investors in the U.S. public capital markets as well as other markets,” Mr. Bricker said.
Mr. Bricker added that he saw value in continuing to consider Mr. Schnurr’s proposal to allow companies to supplement their GAAP reports with IFRS information.
U.S. investors rely on company reports prepared under IFRS to make investment decisions, with around 525 issuers with a market capitalization of approximately $7.3 trillion as of Sep. 16, 2016, Mr. Bricker told the American Institute of Certified Public Accountants conference in Washington. Similarly, U.S. companies looking to purchase foreign companies rely on financial results filed under IFRS.
Still, it is uncertain how promptly the SEC would act on an IFRS proposal, with a new administration about to take office that will appoint a replacement for departing SEC Chair Mary Jo White and other new SEC members.
“I can’t predict the priorities of the commission,” Mr. Bricker said.
[The Wall Street Journal]