Despite more the significant efforts toward converging the two sets of accounting standards, many differences still remain between U.S. GAAP and IFRS. The SEC has not truly acted on convergence in several years, so the future of convergence remains unclear. However, the SEC has promised it will ultimately make a determination in the not too distant future (Cohn, 2016).
The SEC currently allows corporations from other countries to use IFRS without reconciliation. There is no such option for U.S. companies, and a mandatory switch to IFRS is not likely to happen soon. However, IFRS information is increasingly important to many U.S. corporations as they engage in the global economy. U.S. corporations are engaged in cross-country transactions, own or manage foreign subsidiaries, participate in mergers & acquisitions, and otherwise report to foreign investors who prefer IFRS. Thus, to be successful in the US and foreign capital markets, it is increasingly important to provide information that satisfies both IFRS and US GAAP (PwC, 2015).
Due to the importance of providing useful information to a global audience, the SEC is considering regulatory changes that would make it possible for U.S. public companies to provide IFRS-based information as a supplement to U.S. GAAP financial statements. Under the proposal, domestic corporations would continue to provide U.S. GAAP financial statements, but would have the option of voluntarily providing supplemental information prepared in accordance with IFRS (Tysiac, 2015). I bring this up because one of the main sticking points for convergence was the treatment of Leases. Should we stick with GAAP? Converge with IFRS? Thoughts?
Cohn, M. (2016, January). IFRS resurgent. Accounting Today, 30(1), 21-21,23. Retrieved from
PriceWaterhouseCoopers (PwC). (2015, September). IFRS and US GAAP: Similarities and
differences. PwC. Retrieved from http://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc-ifrs-us-gaap-similarities-and-differences-2015.pdf
Tysiac, K. (2015, December 9). SEC discussing supplementary IFRS option for US issuers.
Journal of Accountancy. Retrieved from http://www.journalofaccountancy.com/news/2015/dec/sec-discusses-ifrs-supplementary-option-201513518.html
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