The SEC is considering regulatory changes that would make it possible for U.S. public companies to provide IFRS-based information as a supplement to U.S. GAAP financial statements.
SEC Chief Accountant James Schnurr said Wednesday that the SEC staff will hold discussions with SEC commissioners regarding regulatory changes that could pave the way for supplementary IFRS information to be provided by domestic companies.
Under the proposal, companies would continue to provide U.S. GAAP financial statements as they do today but would have the option of voluntarily providing supplemental information prepared in accordance with IFRS. Schnurr has said this could be anything from a full set of IFRS financial statements to selected financial data, or possibly a reconciliation to IFRS.
“This proposal has the potential to be a useful next step,” SEC Chair Mary Jo White said Wednesday at the AICPA Conference on Current SEC and PCAOB Developments.
Since 2007, the SEC has permitted foreign private issuers to file financial statements prepared under IFRS without requiring reconciliation to U.S. GAAP. As a result, White said, more than 500 issuers representing trillions of dollars in aggregate market capitalization report to the SEC using IFRS.
“The commission staff monitors and reviews the application of those standards in filings with the SEC in the same manner that it monitors and reviews the application of GAAP, making IFRS very much a focus in the SEC’s work,” White said.
White is eager for the SEC to address the issue of IFRS.
“As I have said in the past, I believe it is important for the commission, as a commission, to make a further statement about its general views on the goal of a single set of high-quality global accounting standards—a topic that the commission itself has not spoken on since 2010,” she said.
Schnurr said he does not have a timetable for the consideration of the issue.
—Ken Tysiac (firstname.lastname@example.org) is a JofA editorial director.