The chief accountant at the Securities and Exchange Commission is distancing himself from the idea he floated late last year that perhaps the SEC should allow U.S. public companies an option to report under International Financial Reporting Standards.
At a one-day conference in New York, James Schnurr, chief accountant at the SEC, said in prepared remarks that staff outreach in recent months revealed “virtually no support” to have the SEC mandate the use of IFRS for all registrations, and “little support” for providing an option for domestic companies to prepare financial statements under IFRS. The staff has reached out to to preparers, investors, auditors, regulators, and standard-setters, he said.
Schnurr added, however, “there is continued support for the objective of a single set of high-quality, globally accepted accounting standards.” His goal is to deliver a recommendation to SEC Chair Mary Jo White “in the near term,” although he did not elaborate any further on what he plans to recommend. “The staff is currently developing a recommendation, and I am hopeful that we will be able to provide some clarity to investors,” he said.
During outreach, stakeholders had plenty of questions for the SEC about the possibility of allowing domestic issuers to voluntarily report under IFRS without reconciliation. “Why would a company spend the time and money to provide IFRS-based information on a voluntary basis?” Schnurr said. “What are the benefits of providing this information?” SEC staff also heard questions about whether such a voluntary option would represent the SEC’s last word on IFRS in the United States, and whether the SEC is still committed to a single set of global accounting standards.
For the balance of his remarks, Schnurr seemed to be tossing the ball back on the court of the standard-setters, pointing out many ways U.S. and international standards are already converged and urging the Financial Accounting Standards Board and the International Accounting Standards Board to continue the journey. “While differences still exist, significant progress has been made by the FASB and IASB and much of IFRS and U.S. GAAP are converged,” he said. “It is critical that the two boards continue to work together toward the objective of a single set of high-quality, globally accepted accounting standards.”
Schnurr continued: “I believe that, for the foreseeable future, continued collaboration is the only realistic path to further the objective of a single set of high-quality, global accounting standards. In making my recommendation to Chair White about IFRS, and as the commission considers how best to resolve or lessen the uncertainty existing today, we will collectively need to consider the best approach forward for the boards to continue their collaboration to support the objective of a single set of high-quality globally accepted accounting standards.”