Response to US SEC publication of staff report on IFRS

15 July 2012

The Trustees of the IFRS Foundation note the publication of a staff report representing the final element of a Work Plan developed by the staff of the US Securities and Exchange Commission (SEC). The Work Plan, initiated in 2010, is intended to assist the Commission in determining whether and how to incorporate International Financial Reporting Standards (IFRSs) into the US financial reporting regime.

Commenting on the publication of the report, Michel Prada, Chairman of the Trustees said:

"The Trustees note the publication of the final SEC staff report on the possible use of IFRSs within the United States. The report reiterates the many challenges that a large economy such as the United States faces when transitioning to IFRSs – challenges that other jurisdictions have successfully overcome when completing their own transition to IFRSs.

The Trustees will carefully study the report in detail and take further steps as necessary. Our initial assessment is that many of the findings are broadly consistent with the conclusions of the Monitoring Board and Trustees’ respective Governance and Strategy Reviews completed earlier in the year, and are already addressed in the work plan for 2012.

While recognising the right of the SEC to determine the method and timing for incorporation of IFRSs in the United States, we regret that the staff report is not accompanied by a recommended action plan for the SEC. Given the achievements of the convergence programme inspired by repeated calls of the G20 for global accounting standards, a clear action plan would be welcome.

For the benefit of both US and international stakeholders, the Trustees look forward to the SEC resolving the continued uncertainty regarding the US’s commitment to global accounting standards."

Hans Hoogervorst, Chairman of the IASB, said:

"IFRSs have already achieved critical mass as international standards and with more than two thirds of the G20 now on board, the momentum behind them becoming global accounting standards is irreversible. We are confident in our mission to achieve a single set of high quality global accounting standards and we continue to work to serve investors and other users of IFRSs across the world.

We are at a pivotal moment for our organisation. The IASB has started working on a new agenda. The era of convergence is coming to an end. We are revamping our institutional infrastructure to provide for a more inclusive approach to international standard setting. This is the right timing to come on board and participate in shaping the future of global accounting."

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