The Trustees of the IFRS Foundation today published a staff analysis of the United States (US) Securities and Exchange Commission (SEC) Final Staff Report on International Financial Reporting Standards (IFRS Standards). The SEC Staff Report, issued on 13 July 2012, represented the culmination of almost two years' work by SEC staff to analyse the issues related to the possible incorporation of IFRS Standards into the US financial reporting regime.
Shortly after the SEC Staff Report was published, the Trustees issued a statement indicating their commitment to give careful consideration to the report’s observations. Consequently, the Trustees asked the IFRS Foundation staff to conduct an analysis of the SEC Staff Report for the benefit of both the IASB and the international community.
The staff's detailed analysis addresses matters raised in the SEC Staff Report regarding IFRS Standards as global accounting standards, the IASB as a global accounting standard-setter and the challenges for a US transition to IFRS Standards (including adoption and endorsement matters).
To assist staff in their analysis of the SEC Staff Report within an international context, the IFRS Foundation commissioned a study of existing academic research on the benefits and consequences of global accounting standards. That research is published as an appendix to the staff analysis.
Commenting on the publication of the staff analysis, Chairman of the Trustees Michel Prada said:
In their February 2010 statement on global accounting standards, the SEC Commissioners reaffirmed their strong commitment to a single set of global standards and the recognition that IFRS Standards were best placed to serve that role for US markets. The statement directed SEC staff to develop and execute a work plan to support this process and the final SEC Staff Report on IFRS was published in July 2012.
The IFRS Foundation staff analysis released today complements the findings of the SEC Staff Report with academic research as well as the experiences of other jurisdictions that have already completed their own transitions to IFRS Standards. Accordingly, the analysis should also be of use to other jurisdictions that are evaluating whether and how to adopt IFRS Standards.
While acknowledging the challenges, the analysis conducted by the IFRS Foundation staff shows that there are no insurmountable obstacles for adoption of IFRS Standards by the United States, and that the US is well placed to achieve a successful transition, thus completing the objective repeatedly confirmed by the G20 leaders.