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Sec/Ifrs

In: Business and Management

Submitted By themick11
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For several years, the SEC has been considering the option to adopt IFRS for all U.S. Issuers as a means to have central reporting standards for U.S. to International Company offerings. While the FASB and IASB work on key projects such as revenue recognition, leasing standards, and financial instruments, the SEC continues to analyze this progress and weigh the benefits and concerns with adopting IFRS for U.S. companies. This paper will focus on the concerns of SEC in fully implementing IFRS, what steps some companies are taking to prepare for the adjustment to IFRS, and the outlook of the possibility of a convergence to IFRS in the future. Two major concerns for the SEC in adopting IFRS are the costliness for U.S. companies along with the timeliness of the process. Some of the costs include funding the IASB, maintenance of IFRS, application and enforcement, and tax implications. Meanwhile, companies are preparing for a convergence with IFRS in advance because of some of the complex changes and significant impact to financial reporting for revenue recognition and leasing standards. Also, some companies, such as Ford Motor Company, are adopting IFRS before an official convergence to save time and money. While some standards would be easy to converge with IFRS, others would require many companies to change accounting systems, controls, and procedures, costing companies time and significant costs. Although no official decision has been made on the convergence of U.S. GAAP to IFRS by the SEC, U.S. companies are getting prepared for the possibility of new reporting standards to save time and money in the future. The outlook on IFRS being mandated anytime soon is doubtful given the background of new SEC Chairman, Mary Jo White and her focus on protecting investors and securities law enforcement.

Sources
IFRS USA. “Will IFRS be Mandated Under New SEC Chair…...

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