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The board of the Financial Accounting Foundation said it backed the incorporation approach suggested by the SEC in May but proposed several changes it said would help the shift to global standards to win acceptance in the US.
John Brennan, chairman of the board of trustees of the FAF, called the SEC’s May proposals “a sound path forward in moving the United States to a set of high-quality, globally comparable, international accounting standards”.
The FAF proposed that the Financial Accounting Standards Board, the US rulemaker, retain "sovereign authority” in setting US standards but would stop separate work on new rules where its international counterpart, the IASB, was already undertaking a project.
The foundation also argued that the FASB should incorporate the main IFRS standards in the US where “that standard improves the quality of financial reporting” or where comparability of accounts would be improved with no detrimental impact on reporting quality.
The SEC is expected to make a decision on how to proceed this year. It is likely to retain US GAAP as the basis for financial reporting, avoiding legal costs and problems that could arise in a wholesale switch to IFRS.
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