A staff paper published Thursday by the SEC’s Office of the Chief Accountant (OCA) presents in detail and solicits comments on the so called “condorsement” approach to incorporating IFRS into the U.S. financial reporting system.
“The Staff’s discussion in this Staff Paper is not intended to suggest that the Commission has determined to incorporate IFRS,” the paper says, “or that the discussed framework is the preferred approach or would be the only possible approach.”
The paper summarizes other jurisdictions’ approaches and outlines condorsement as another possible option, elaborating on the concept introduced in December by a member of the OCA staff at the AICPA National Conference on Current SEC and PCAOB Developments. The paper was published as an update on the SEC staff’s Work Plan for global accounting standards.
“Importantly, the framework would retain a U.S. standard setter and would facilitate the transition process by incorporating IFRSs into U.S. GAAP over some defined period of time (e.g., five to seven years),” the paper notes. “At the end of this period, the objective would be that a U.S. issuer compliant with U.S. GAAP should also be able to represent that it is compliant with IFRS as issued by the IASB.”
“The focus of this Staff Paper is to outline a possible approach for incorporation of IFRS into the U.S. financial reporting system, if the Commission were to decide that incorporation of IFRS is in the best interest of U.S. investors,” OCA reported. “This [paper] does not provide an extensive discussion of a potential timeline of incorporation.”
The paper is available here.
The SEC is seeking feedback by July 31. Comments can be made through the SEC website.
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