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 have formed a new 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.
NEWS
No IFRS Requirement Until 2015 or Later Under New SEC Timeline
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.
SEC Action on IFRS Could Come Early in 2010
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.”
FEATURE ARTICLES
Countdown to Convergence
March 2010
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?
December 2009
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
November 2009
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
October 2009
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
September 2009
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
April 2009
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
April 2009
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
February 2009
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
February 2009
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.
IFRS: Beyond the Standards
February 2009
Recent accounting research suggests that national culture and language translation could undermine the rigorous interpretation and application of IFRS and lead to a lack of comparability across countries. The authors outline the challenges and make recommendations for addressing them.
VIDEOS
SEC’s Schapiro Speaks on IFRS
February 2010
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
October 2009
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
October 2009
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
August 2009
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
August 2009
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.
ADDITIONAL RESOURCES
Web site
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