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.
NEWS
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
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
August
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.
Convergence
Milestone
August 2010
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
April
2010
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
April 2010
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.
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.
VIDEOS
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.
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
