AICPA urges IFRS ‘adoption option’ for US public firms
The American Institute of Certified Public Accountants (AICPA), which recently signed a joint venture with CIMA to launch a new global designation, the CGMA, has urged the Securities and Exchange Commission to allow US public companies the option of adopting use of International Financial Reporting Standards (IFRS), as the commission weighs a possible future framework for incorporating IFRS into the US financial reporting system.
“Whether or not the SEC decides to incorporate IFRS into the US financial reporting system through an endorsement/convergence approach, we believe US issuers should be given the option to adopt IFRS as issued by the IASB [the International Accounting Standards Board],” Paul V. Stahlin, AICPA chairman, and Barry C. Melancon, AICPA president and CEO, said in a four-page letter to the SEC.
“An adoption option would provide a level of consistency in the treatment of US companies and foreign private issuers that report under IFRS that does not exist today, and would facilitate the comparison of US companies that elect IFRS with their non-US competitors that use IFRS.
“Furthermore, giving US companies an option to adopt IFRS as issued by the IASB would be another important step towards achieving the goal of incorporating IFRS into the US financial reporting system.
“Anecdotal evidence suggests that the number of companies that would choose such an option would not be such that system-wide readiness would become an issue,” Stahlin and Melancon added.
The SEC’s request for comments on incorporating IFRS into the US financial reporting system sets the stage for a possible decision by the commission later this year that may set parameters for convergence of IFRS with US Generally Accepted Accounting Principles and a phased timeline for US adoption of IFRS.