Following a joint meeting of the IASB and the FASB last week, SEC chairman Mary Schapiro provided a hint on U.S intentions on convergence with IFRS.
Schapiro read a 40-word statement last week that included the words "I am greatly encouraged by the commitment of the IASB and the FASB to provide greater transparency to the standard setting process and their convergence efforts. I believe that these efforts will result in improved financial information provided to investors."
Schapiro and the Obama administration have given conflicting signals in the past as to what direction the SEC would take in light of the financial crisis. She has been quiet on the subject of IFRS convergence since taking over as SEC Chairman last in January. Schapiro has now provided a degree of direction for companies looking to decide whether to ramp up their IFRS adoption efforts. The SEC have said that they will decide in 2011 whether U.S. companies will switch from U.S. GAAP to IFRS. The SEC had previously hinted at what the convergence timeline would be.
The IFRS road map would have the largest companies reporting under IFRS in 2014, with all public companies following by 2016. The SEC has sought feedback and received over 200 comment letters. The comments have not had an overall theme and 200 is a small number considering the number of potential stakeholders, which include public companies, investors such as pension funds mutual fund issuers, auditors, educators, and others.
Some U.S.-based companies, such as Microsoft have ramped up their convergence efforts and companies like United Technologies have made a decision to switch to IFRS ahead of the SEC's decision. These companies have significant operations in countries that have already converged, such as the EU. Ultimately they will save on accounting and audit costs by converging.
The SEC has previously indicated that there are a number of significant issues to be resolved including working out convergence paths for differences between IFRS and U.S. GAAP on critical issues and funding and governance.
Showing posts with label schapiro. Show all posts
Showing posts with label schapiro. Show all posts
Monday, November 9, 2009
Thursday, February 5, 2009
The Brakes on IFRS
SEC Chairman Mary Schapiro Not following Cox on IFRS
Incoming chair Mary Schapiro, approved by the Senate as SEC Chairman in January, will not follow Christopher Cox on IFRS. She wants a slower approach to U.S. adoption of international accounting rules.
During Schapiro’s confirmation hearings she was asked several questions, including questions about IFRS, Sarbanes Oxley and other topics. She made oral responses, and releases a letter in January providing her written responses. In her she said that she won’t let the International Accounting Standards Board make accounting rules for U.S. companies—yet.
In Schapiro's opinion, the IASB has not shown it can resist political pressure—as became obvious when Sir David Tweedie, IASB chair threatened to resign if there was a recurrence of the IASB caving in to pressure by banks and politicians to change the rules on fair value reporting standards.
Schapiro also has said that she is concerned about IFRS standards quality and the fast tracking of the adoption in 2014. The SEC extended the deadline for comments on the 2014 adoption date by 60 days to April. The previous deadline was February 19.
Schapiro wants FASB and whatever standard-setting authority that succeeds it to not be influenced by political pressure. She wants the SEC to have a high level role in oversight of The FASB to ensure that they are diligent in keeping up with needed accounting changes.
Schapiro also stated that accounting rules were not responsible for the recent market crash.
You can read the written responses here.
Incoming chair Mary Schapiro, approved by the Senate as SEC Chairman in January, will not follow Christopher Cox on IFRS. She wants a slower approach to U.S. adoption of international accounting rules.
During Schapiro’s confirmation hearings she was asked several questions, including questions about IFRS, Sarbanes Oxley and other topics. She made oral responses, and releases a letter in January providing her written responses. In her she said that she won’t let the International Accounting Standards Board make accounting rules for U.S. companies—yet.
In Schapiro's opinion, the IASB has not shown it can resist political pressure—as became obvious when Sir David Tweedie, IASB chair threatened to resign if there was a recurrence of the IASB caving in to pressure by banks and politicians to change the rules on fair value reporting standards.
Schapiro also has said that she is concerned about IFRS standards quality and the fast tracking of the adoption in 2014. The SEC extended the deadline for comments on the 2014 adoption date by 60 days to April. The previous deadline was February 19.
Schapiro wants FASB and whatever standard-setting authority that succeeds it to not be influenced by political pressure. She wants the SEC to have a high level role in oversight of The FASB to ensure that they are diligent in keeping up with needed accounting changes.
Schapiro also stated that accounting rules were not responsible for the recent market crash.
You can read the written responses here.
Thursday, January 15, 2009
High Level Obama Advisors Disagree on IFRS
Two key advisors to Barack Obama today expressed different opinions over the SEC move to shift U.S. accounting rules to IFRS.
The clash casts some doubt on the SEC roadmap requiring large public companies to move from U.S. GAAP to IFRS by 2014.
Mary Schapiro, SEC Chair:
“I would proceed with great caution so we don’t have a race to the bottom.”. “I won’t feel bound by the [IFRS] roadmap.”
Paul Volcker, Chairman of Obama's Economic Recovery Advisory Board:
"We ought to be working toward international accounting standards and have them standard around the world under the general aegis of the International Accounting Standards Board, and there's been a lot of progress in that direction."
Volcker is a a former chairman of the International Accounting Standards Committee Foundation, IASB's parent organization. IASB determines the makeup of IFRS. Volcker is also a former chairman of the U.S. Federal Reserve Board.
Schapiro said she has concerns about the pace of the timeline, the independence of IASB, and the quality of the IFRS standards. As well, Schapiro has concerns over the lack of detail in IFRS and the additional room for interpretation, and the cost cost of the conversion to IFRS, estimated by the SEC to be up to $32 million for the largest companies adopting IFRS.
The clash casts some doubt on the SEC roadmap requiring large public companies to move from U.S. GAAP to IFRS by 2014.
Mary Schapiro, SEC Chair:
“I would proceed with great caution so we don’t have a race to the bottom.”. “I won’t feel bound by the [IFRS] roadmap.”
Paul Volcker, Chairman of Obama's Economic Recovery Advisory Board:
"We ought to be working toward international accounting standards and have them standard around the world under the general aegis of the International Accounting Standards Board, and there's been a lot of progress in that direction."
Volcker is a a former chairman of the International Accounting Standards Committee Foundation, IASB's parent organization. IASB determines the makeup of IFRS. Volcker is also a former chairman of the U.S. Federal Reserve Board.
Schapiro said she has concerns about the pace of the timeline, the independence of IASB, and the quality of the IFRS standards. As well, Schapiro has concerns over the lack of detail in IFRS and the additional room for interpretation, and the cost cost of the conversion to IFRS, estimated by the SEC to be up to $32 million for the largest companies adopting IFRS.
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