With FASB and the IASB fast approaching their June 2011 completion deadline for major convergence projects, the CPA profession is poised to assimilate—at unprecedented speed—an array of profound changes to GAAP. As public companies watch the SEC for guidance on IFRS adoption, private companies have begun to examine whether the new international GAAP will be right for them. In response, the AICPA and Financial Accounting Foundation formed a blue-ribbon panel to examine private company financial reporting requirements.
The following is a compilation of JofA news, articles and videos on these important developments, along with links to additional resources.
AICPA: Allow U.S. Companies the IFRS Option Now
Oct. 6, 2011
AICPA President and CEO Barry Melancon called on the SEC to immediately allow U.S. companies the option of using IFRS.
AICPA Recommends Allowing U.S. Public Companies to Choose IFRS
Aug. 19, 2011
The AICPA has recommended to the SEC that U.S. public companies be allowed the option of adopting use of IFRS as the commission weighs a possible future framework for incorporating IFRS into the U.S. financial reporting system.
FASB, IASB Set to Re-Expose Leasing Proposals
July 21, 2011
FASB and the IASB announced they intend to re-expose their revised proposals for a common leasing standard. Re-exposing the revised proposals will provide an opportunity for comment on revisions the boards have made since the publication of an exposure draft on leasing in August 2010.
SEC’s Casey Pushes to Incorporate IFRS
June 30, 2011
Calling the risks of not moving forward with IFRS for U.S. issuers “simply too great,” SEC Commissioner Kathleen Casey said the SEC “must decide to incorporate IFRS for U.S. issuers.”
FASB, IASB Align Presentation of Other Comprehensive Income
June 17, 2011
FASB issued an Accounting Standards Update (ASU) that the board said is intended to increase the prominence of other comprehensive income in financial statements and to facilitate convergence of U.S. GAAP and IFRS. Simultaneously, the International Accounting Standards Board (IASB) issued amendments to IAS 1, Presentation of Financial Statements.
Revenue Recognition Proposals to be Re-exposed in Third Quarter
June 15, 2011
FASB and the IASB announced their intent to re-expose their revised revenue recognition proposal in the third quarter. The move follows joint deliberations on stakeholder feedback received from a June 2010 exposure draft that would create a single revenue recognition standard for both U.S. GAAP and IFRS.
FASB, IASB Issue “Largely Identical” Guidance on Fair Value
May 12, 2011
FASB and the International Accounting Standards Board (IASB) issued guidance on fair value measurement and disclosure requirements that the boards said in a press release is “largely identical” across IFRS and U.S. GAAP.
IASB and FASB Report Progress on Convergence
April 21, 2011
FASB and the International Accounting Standards Board (IASB) published a progress report on their joint convergence projects. The progress report highlights several developments relating to pending projects.
SEC Forum to Address Benefits, Challenges of IFRS for U.S.
April 20, 2011
The SEC said it is hosting a round-table meeting July 7 to discuss benefits or challenges in potentially incorporating IFRS into the financial reporting system for U.S. issuers.
FASB, IASB Announce Delay on Priority Projects
April 14, 2011
The heads of FASB and the International Accounting Standards Board (IASB) announced they will take “a few additional months” beyond their June target date to complete priority joint convergence projects on revenue recognition, leases, financial instruments and insurance.
FASB, IASB Address Offsetting Transactions, Impairment Models
Jan. 31, 2011
FASB and the IASB took two more steps toward convergence with the release of joint proposals that address offsetting transactions and accounting for impairment of financial assets.
Compromise Reached for Financial Instruments; Revenue Recognition and Leases Less Certain
Jan. 25, 2011
FASB Chairman Leslie Seidman said via webcast that FASB and the International Accounting Standards Board (IASB) have reached a compromise on a single approach to impairment for financial instruments. She acknowledged, however, that substantial constituent feedback on the boards’ joint proposals for revenue recognition and leases reveals several major issues the boards will need to deal with.
Schapiro, SEC Staff Want Companies to Have Ample Time for IFRS Adoption
Dec. 6, 2010
The SEC will allow public companies a minimum of four years to adjust if it decides to mandate the use of IFRS, SEC Chairman Mary Schapiro said. The remark came in response to a question from the audience at the AICPA’s National Conference on Current SEC and PCAOB Developments in Washington.
FASB, IASB: Convergence Priorities on Target for June 2011
Dec. 1, 2010
FASB and the IAS Breleased a convergence progress report that said their priority projects are on target for completion by June 2011 or earlier.
SEC Releases Update on IFRS Plan
Oct. 29, 2010
In a progress report, the SEC staff details its progress thus far and remaining research and analysis to be done as the commission considers whether, when and how to allow domestic issuers in the U.S. to use IFRS.
AICPA to SEC: Companies Will Need as Much as Five Years to Ready for IFRS Adoption
Oct. 16, 2010
Giving companies enough time to carefully prepare for a move from U.S. GAAP to IFRS is critical, the AICPA told the SEC in a comment letter. The AICPA assembled members from business and industry with public company backgrounds to discuss questions the SEC posed in a recent request for comment about a potential IFRS mandate.
Proposal Would Require Most Leases to Appear on the Balance Sheet
Aug. 17, 2010
FASB and the IASB unveiled a joint proposal to revamp lease accounting. The proposal would result in a single “right-of-use” approach applied consistently to lease accounting for lessees and lessors.
FASB, IASB Propose Common Standard for Fair Value Measurement and Disclosure
June 29, 2010
FASB and the IASB issued separate exposure drafts intended to develop common requirements for measuring fair value and for disclosing information about fair value measurements in U.S. GAAP and IFRS. The EDs are the result of the boards’ joint efforts to ensure that fair value will have the same meaning in U.S.
Big Changes Proposed for Revenue Recognition
June 24, 2010
FASB and the IASB released a proposal that would create a single revenue recognition standard for both U.S. GAAP and IFRS. The standard is designed to streamline accounting for revenue across industries and correct inconsistencies in existing standards and practices.
IASB Chairman Outlines Approach for Reconciling Financial Instrument Standards
May 25, 2010
International Accounting Standards Board Chairman Sir David Tweedie on Tuesday outlined a possible approach for reconciling the divergent IASB and FASB models for financial instruments accounting.
SEC Chief Accountant Says Convergence Need Not Be Completed by June 2011
April 27, 2010
While FASB and the IASB work to complete an unprecedented 11 standards over the next 14 months, SEC Chief Accountant James Kroeker told the JofA that he would support the boards’ cutting the number of projects due in June 2011, provided there was good rationale for a delay.
No IFRS Requirement Until 2015 or Later Under New SEC Timeline
SEC Action on IFRS Could Come Early in 2010
Feb. 24, 2010
The SEC unanimously approved a new timeline that envisions 2015 as the earliest possible date for the required use of IFRS by U.S. public companies. The SEC action calls for more study of IFRS and a 2011 vote on whether to move ahead with an IFRS mandate.
Dec. 9, 2009
SEC Commissioner Elisse B. Walter said she expects the commission to “consider further action” on IFRS adoption early next year. Walter’s comments at an AICPA conference followed remarks by SEC Chief Accountant James Kroeker in which he said more information about IFRS adoption would be forthcoming “in the short term.”
IASB Releases New Standard for Financial Instruments
Nov. 12, 2009
The International Accounting Standards Board issued a new standard on the classification and measurement of financial assets. Publication of the standard represents completion of the first part of a three-part project to replace IAS 39, Financial Instruments: Recognition and Measurement, with a new standard, IFRS 9, Financial Instruments.
IASB Proposes New Accounting Model for Financial Instruments
Nov. 5, 2009
The International Accounting Standards Board published proposals that if implemented would fundamentally shift the way banks and other financial institutions report the value of loans (or portfolios of loans) and other financial instruments carried at amortized cost.
FASB, IASB Leaders Boost Collaboration Efforts to Meet 2011 Convergence Goal
Oct. 29, 2009
FASB and the International Accounting Standards Board will begin meeting monthly to try to speed up efforts to develop a common set of accounting standards by the target date of 2011, the heads of both boards during a general session at a conference on IFRS held in New York.
FASB Allows Early Adoption of Key Provisions of New Revenue Recognition Approach
Sept. 24, 2009
FASB brought U.S. GAAP closer to the approach FASB and the International Accounting Standards Board have outlined in their preliminary views documents for their joint revenue recognition project that is scheduled for completion in 2011.
G-20: Achieve Single Set of Global Accounting Standards by June 2011
Sept. 27, 2009
In an agreement to make dozens of changes to the regulation of financial markets, systems and institutions, the leaders of the G-20 called on “international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.”
Nearly a decade after FASB and the International Accounting Standards Board (IASB) agreed to converge their standards in “The Norwalk Agreement,” the SEC staff floated a concept in May that would redefine convergence and establish FASB as an endorsement body for IASB standards.
The release of proposed standards on revenue recognition and accounting for financial instruments helped mark an important phase in the push toward convergence of U.S. GAAP and IFRS.
Technology Considerations for Converting to IFRS
Lewis A. Dulitz, vice president of accounting policies and research at Covidien—a $10.7 billion health care products company with 42,000 employees in more than 60 countries—was part of a team that implemented the necessary technology changes in Europe to help Covidien convert to IFRS and led a similar team in the U.S.
IFRS for SMEs-U.S. GAAP Comparison Tool Available Online
While the SEC moves toward a 2011 vote on whether to require U.S. public companies to report using IFRS, a more compact version of the international standards is already an option, subject to state board approval, for U.S. private companies. Now there’s a free online tool to help preparers understand how that streamlined standard compares to U.S.
Countdown to Convergence
FASB and the IASB’s aggressive plan to complete eight major convergence projects by June 2011 promises to significantly impact all CPAs and companies, public and private, that report under U.S. GAAP or IFRS. Get up to speed on the plan with this synopsis.
IFRS for SMEs: The Next Standard for U.S. Private Companies?Following the International Accounting Standards Board’s completion of its version of International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs), financial reporting experts introduce the new standard and assess whether it’s a viable alternative to U.S. GAAP for private company reporting.
Highlights of IFRS Research
Summaries of IFRS research articles yield insights practitioners can glean for achievable benefits and pitfalls to avoid in implementing IFRS.
Interpreting IFRS: Understanding the Role of the International Financial Reporting Interpretations Committee
For CPAs concerned about how consistent interpretation and application can be achieved in the principles-based environment of IFRS, this article introduces the process of developing official interpretations of IFRS through the International Financial Reporting Interpretations Committee (IFRIC) and also explains how IFRIC differs from FASB’s Emerging Issues Task Force.
IFRS Risk Planning and Controls Execution
The International Accounting Standards Board may soon become the lead standard setter for U.S. public companies. But the U.S. system of internal control over financial reporting under the SEC will likely continue much as we know it now. This article explores how U.S. public companies can begin preparing their internal control and operational risk systems for IFRS.
IFRS: A Preparer's Point of View
Following the recent publication of the SEC's proposed road map for the adoption of IFRS by U.S.-based public companies, American CPAs may soon be leading IFRS transition teams. An industry-based CPA with two major IFRS implementations under his belt shares best practices and tips for success.
IFRS Converges to U.S. GAAP on Segment Reporting
As part of the ongoing effort to converge with U.S. GAAP, the International Accounting Standards Board developed IFRS 8, Operating Segments, which became effective Jan. 1. This standard closely resembles FASB Statement no. 131's "through the eyes of management" approach and supersedes IAS 14, from which it differs in many important aspects.
Checklist: Converting to IFRS
The SEC's proposed road map for the potential use of IFRS in financial statements prepared by U.S. issuers could result in the mandatory use of international standards beginning in 2014, 2015 or 2016, depending on a company's size.
Using IFRS to Drive Business Development
The growing footprint of IFRS holds rich opportunities for small and midsize CPA firms to grow their practices. IFRS-related work in the United States has largely been the domain of major firms thus far. But there’s a large space that small and midsize firms can fill given the right positioning, knowledge and resources.
Sir David Tweedie: The Role of the U.S. in IFRS
July 23, 2010
IASB Chairman David Tweedie emphasizes the importance of U.S. involvement in IFRS. He says completing IASB-FASB convergence projects is his top priority in his last year on the international board.
IFRS Update: What the New Timeline Means for CPAs
March 25, 2010
The AICPA's Arleen Thomas, CPA, discusses the SEC work plan for IFRS, what the new timeline means for CPAs preparing for international standards, and progress of the FASB and IASB convergence projects.
SEC’s Schapiro Speaks on IFRS
Hear SEC Chairman Mary Schapiro’s Feb. 24 remarks on the SEC’s IFRS proposal.
What’s Needed for IFRS: A Perspective From SEC Chief Accountant James Kroeker
SEC Chief Accountant James Kroeker tackles questions on the commission’s role in IFRS adoption, the litigious environment in the U.S. and whether first-time IFRS adopters should be afforded leniency.
Paul Volcker on the Impact of IFRS Adoption in Global Capital Markets
Paul A. Volcker, Chairman of the President’s Economic Recovery Advisory Board, on Thursday discussed the advantages of adopting IFRS in the United States, whether 2011 is a reasonable convergence deadline and how the independence of FASB and the IASB should be maintained.
Form Your IFRS Team
In this installment of Steps to Success, Ernst & Young's Steve Arnold, CPA, outlines key steps to follow when forming your IFRS team.
Leverage Your SOX Investment for Conversion to IFRS
In this installment of Steps to Success, Ernst & Young's Steve Arnold, CPA, a senior manager in the Advisory Services practice, explains how to leverage your SOX investment for conversion to IFRS.
IFRS resources from the AICPA, www.ifrs.com
SEC road map
Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers, www.sec.gov/spotlight/ifrsroadmap.htm