While FASB and the IASB work to complete an unprecedented 11 standards over the next 14 months, SEC Chief Accountant James Kroeker told the Journal of Accountancy this week that he would support the boards’ cutting the number of projects due in June 2011, provided there was good rationale for a delay.
“June 30, 2011, is an arbitrary deadline and it’s not one that’s been put in place by the SEC or by our road map,” said Kroeker. Citing FIN 46(R) as an example of an accelerated project that later needed to be reworked, Kroeker said that what’s most important is to ensure through the exposure process that the final standards are a “long term, sustainable solution.”
Kroeker made his comments in a JofA exclusive interview at the Pace University Lubin Forum on Contemporary Accounting Issues held Tuesday in New York.
Financial instruments and lease accounting are the two projects Kroeker suggested should remain atop the boards’ priority list. Others, such as financial statement presentation, could be completed through a more gradual process, he said.
Asked specifically about revenue recognition, Kroeker said that while he could see room for improvement to the industry-specific approach in U.S. GAAP, he didn’t see revenue recognition as the highest priority right now.
Kroeker said that although he doesn’t see convergence as the only potential path for IFRS to become sufficiently developed and consistent in application for use as the single set of accounting standards in the U.S. reporting system, convergence is “critical for these projects.”
When asked about the SEC staff’s IFRS work plan, unveiled in February, Kroeker emphasized that the SEC staff will be providing public updates on its progress, with the first report due out by October. He said that rather than setting “go or no-go” thresholds, the work plan’s intent is to compile a body of knowledge from which the SEC staff can make sound recommendations to the commission.