The Securities and Exchange Commission is exploring whether to provide U.S. companies with the option to present their financial statements under International Financial Reporting Standards, perhaps even without a reconciliation to U.S. GAAP, said Chief Accountant James Schnurr.

In remarks at a national conference of the American Institute of Certified Public Accountants, Schnurr said he is studying the staff’s historical work on a possible adoption of IFRS in the United States, reaching out to stakeholders for current views, and hopes to make a recommendation to the full commission in “two to three months.” Any possible move on the part of the SEC would be put forth in a proposed rule that would be subject to public comment, he said.

“Nothing has been ruled out,” said Schurr, who has made it clear in recent weeks that the SEC will act in some fashion on the long-unanswered IFRS question in the United States. But his tendency now, he said, is to explore whether it might be possible to give companies the option to voluntarily provide their financial information under IFRS without having it regarded as non-GAAP information under current SEC rules. “The optional use we want to create a dialogue on is that issuers would voluntarily be able to provide supplemental IFRS financial information, and that could be anything from a full-blown set of IFRS financial statements with notes to selected financial data, to maybe even just a reconciliation if they wanted to,” he said to members of the media after his prepared remarks. That might even include allowing U.S. companies to report under IFRS without a reconciliation to GAAP, as currently permitted for some 500 foreign private issuers that have had that option available to them since 2007. “It is up for debate,” he said. 

Some companies that already prepare their financial statements under IFRS to comply with requirements in other countries might like to provide that information to investors, he said, but existing SEC rules regarding it as non-GAAP might discourage them from doing so, he said. “Should IFRS continue to be considered non-GAAP for such purposes, or should it be thought of differently?” Schnurr said.

Schnurr said SEC Chair Mary Jo White is making it a priority for the SEC to act on the question of when, whether, and in what way the United States would further incorporate IFRS into the U.S. financial reporting system. “Chair White and I both recognize that any continued uncertainty around IFRS results in uneasiness for investors across the globe,” he said. “Therefore, it is a priority of mine to bring a recommendation to the Commission in the near future with the hope of resolving, or at least lessening, this uncertainty.”

When the SEC allowed FPIs to report under IFRS without the reconciliation to U.S. GAAP, many in the financial reporting supply chain believed a larger move to IFRS in some fashion was imminent. After the SEC staff issued the results of its extensive study on IFRS and its application in the U.S. and abroad, the commission took no further action. White said when she assumed the chair position it was a priority for her to reach some conclusion on the issue.

In separate remarks at the AICPA conference, SEC Commissioner Daniel Gallagher said he hasn’t heard much demand from issuers in the past few years for SEC action on IFRS, but he likes the idea of possibly giving issuers some optionality. “I was really thrilled to hear Jim’s idea,” he said. “If we allow for issuers to put out this IFRS information, we can see if people want it,” he said.