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The U.S. standard-setter would take part in the process for developing global standards, but not be responsible for developing new ones or modifying U.S. GAAP.
David M. Katz, CFO.com | US
May 27, 2011
Without weighing in on when — or if — the Securities and Exchange Commission will incorporate international financial reporting standards (IFRS) into the financial reporting system for U.S. issuers, the SEC staff issued a paper on Thursday that shed some light on one possible plan for implementation. The plan would change the Financial Accounting Standards Board's role in standard setting.
While FASB would remain the U.S. standard-setter, its "manner of participation . . . would differ considerably from the FASB's current standard-setting role and responsibilities for U.S. issuers," according to the staff paper. "Most significantly, the FASB would participate in the process for developing IFRS, rather than serving as the principal body responsible for developing new accounting standards or modifying existing standards under U.S. GAAP."
The standards board would also play "an instrumental role in global standard setting by providing input and support to the [International Accounting Standards Board] in developing and promoting high-quality, globally accepted standards; by advancing the consideration of U.S. perspectives in those standards; and by incorporating those standards, by way of an endorsement process, into U.S. GAAP."
Further, FASB would become an educational resource enabling U.S. constituents to properly implement and apply IFRS "and promote ongoing improvement in the quality of financial reporting in the United States," according to the paper.
The SEC had not returned a call at press time. The staff is requesting comment on its paper, noting that feedback "would be most helpful if received before July 31, 2011."