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Chief Accountant Beswick Says IFRS Remains an Option

February 25, 2014

The SEC’s latest statement on IFRS suggests that regulators haven’t decided what to do with the international standards. The agency’s chief accountant says the lack of a firm decision shouldn’t be interpreted as a rejection of the IASB’s guidance.

When the SEC published its Draft 2014-2018 Strategic Plan on February 3, 2014, the plan’s sole mention of IFRS was limited to a statement that the agency will consider “whether a single set of high-quality global accounting standards is achievable.”

Some accountants saw the noncommittal statement and wondered if the international standards would ever be used for all U.S. companies.

In the eyes of the agency’s top accountant, Paul Beswick, the concern was overwrought.

After the SEC made no recommendations about IFRS in its July 2012 Final Staff Report: Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers, many accountants presumed that IFRS was unlikely to be discussed as a policy option in the foreseeable future.

During the annual SEC Speaks conference hosted by the Practising Law Institute in Washington on February 22, former SEC commissioner Edward Fleischman said the FASB and the IASB are going their separate ways now that they are nearly done with the remaining convergence projects.

The vague reference in the SEC strategic plan “raised some eyebrows,” Fleischman said. “Does the suggestion that the FASB and IASB are parting ways imply that you concluded that it’s not achievable?”

“It does not imply that,” Beswick answered. “I think there was a recognition that after the convergence projects were completed, each board was going to have to figure out what’s on their agenda. I wouldn’t read too much into the strategic plan in terms of advance signaling. I think it’s just an acknowledgment that the commission is working on making the determination about the next steps for if and when we want to go, whether the commission wants to go to a single set.”

In the meantime, Beswick said his office is spending a lot of time monitoring the standard-setting decisions at the FASB and IASB.

“As the FASB and the IASB complete their convergence projects, some more successfully than others, they are going to be embarking on separate agendas, and it’s going to be taking a lot of time overseeing those processes,” Beswick said.