FAF and FASB Call for Additional Study of IFRS Conversion

FASB and its parent organization, the Financial Accounting Foundation (FAF), are calling on the SEC for additional study of “strengths, weaknesses, costs, and benefits of possible approaches” to a U.S. shift to IFRS.

In a 134-page comment letter, the FAF and FASB reaffirmed support for the development of a single set of high-quality global accounting standards but called for a thorough analysis of issues identified by the SEC in its proposed road map as well as other issues outlined in their comment letter. The study should include analysis of possible conversion approaches, the letter states, such as convergence through continuation of the joint standard-setting efforts of FASB and the International Accounting Standards Board (IASB) over a longer period of time, as advocated by some investors and other parties.

Under the road map, the SEC would decide in 2011 whether to proceed with new rules to require that U.S. issuers use IFRS beginning in 2014. Early adoption, beginning with years ending on or after Dec. 15, 2009, would be allowed for certain issuers.

FASB also said in its letter that the SEC should not allow limited early use of IFRS by U.S. public companies “unless and until there is a decision that all U.S. public companies will ultimately be required to adopt IFRS.”