In May 7 remarks at Baruch College, SEC Chief Accountant James Schnurr appeared to acknowledge what many have expected for some time—it is unlikely the SEC will mandate the incorporation of International Financial Reporting Standards (IFRS) into US accounting standards.
Mr. Schnurr recalled that SEC Chair Mary Jo White had asked him to make a recommendation to her on IFRS and noted his December 2014 suggestion of an alternative of allowing domestic issuers to provide IFRS-based financial information as a supplement to US GAAP financial statements without requiring reconciliation. (See our previous post.) Based on subsequent discussions he has had with a number of constituencies about IFRS, Mr. Schnurr identified the following key themes:
- There is virtually no support to have the SEC mandate IFRS for all registrants.
- There is little support for the SEC to provide an option allowing domestic companies to prepare their financial statements under IFRS.
- There is continued support for the objective of a single set of high-quality, globally accepted accounting standards.
According to news reports, Mr. Schnurr told the audience that his recommendation to Chair White will probably not include plans to mandate IFRS or give US companies the chance to file under those standards voluntarily. However, Mr. Schnurr stated that continued collaboration between US and international accounting standard setters "is the only realistic path to further the objective of a single set of high-quality, global accounting standards."