Spotlight on Work Plan for
Global Accounting Standards
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The Commission has long promoted the development of a single set of high-quality, globally accepted accounting standards and in February 2010 directed staff to develop and execute a Work Plan regarding this process.
The Work Plan is intended to inform the Commission to make a determination in 2011 about whether to incorporate International Financial Reporting Standards (IFRS) into the financial reporting system for U.S. issuers.
IFRS are issued by the International Accounting Standards Board (IASB) and differ in certain respects from U.S. Generally Accepted Accounting Principles (U.S. GAAP), which include financial accounting and reporting standards issued by the Financial Accounting Standards Board (FASB).
The Commission will also consider progress by the FASB and the IASB in completing their convergence projects under their Memorandum of Understanding.
The Work Plan addresses six key areas:
- Sufficient development and application of IFRS for the U.S. domestic reporting system.
- The independence of standard setting for the benefit of investors.
- Investor understanding and education regarding IFRS.
- Examination of the U.S. regulatory environment that would be affected by a change in accounting standards.
- The impact on issuers, both large and small, including changes to accounting systems, changes to contractual arrangements, corporate governance considerations, and litigation contingencies.
- Human capital readiness.
In executing the Work Plan, SEC staff will gather information using a variety of methods. Staff will provide public progress reports beginning no later than October 2010 and frequently thereafter until the work is complete.
FASB and IASB Convergence Efforts
The FASB and the IASB have been working together toward convergence of accounting standards since 2002, when the Boards announced a Memorandum of Understanding (MOU) to collaborate on the development of common, high-quality standards with the ultimate goal of a single set of high-quality global accounting standards. The Boards updated the MOU in 2006 and 2008 to set forth the scope of their joint work program and to identify targets for completion of convergence projects that the Boards believed were most critical.
Chairman Schapiro Remarks on Convergence of Global Accounting Standards
Text of Remarks
Comments on the
The Commission has requested public comment on behalf of the staff on topics related to its ongoing consideration of incorporating IFRS into the financial reporting system for U.S. issuers.