The US standard-setter has defended its refusal to commit to wholesale adoption of International Financial Reporting Standards (IFRS), as promoted by the International Accounting Standards Board (IASB), citing 'unique' needs of the US market, which may not be shared by others.
In response to disappointment from IASB chairman Hans Hoogervorst that the US had still not incorporated IFRS into its reporting framework, Leslie Seidman, chair of the Financial Accounting Standards Board (FASB), pointed to the unique status of the US reporting environment and its demanding culture in order to explain possible ongoing issues for the US with IFRS.
Addressing delegates at the AICPA (American Institute of CPAs) National Conference on current SEC and PCAOB developments, Seidman indicated that the FASB's 'unique position to understand the needs of US stakeholders, and [that] sometimes those needs are not shared by others'.
Earlier Hoogervorst warned that the 'uncertainty about where the SEC is going to land is not a helpful backdrop for our work on the remaining convergence projects'.
He explained that as the convergence projects are coming to an end, the IASB would be looking at new, multilateral ways to engage national accounting standard-setters, including a new mechanism to allow the global standard-setting community to be more deeply engaged in our standard-setting processes. He said he hoped that the FASB could become a fully engaged partner in this new global forum.
However Seidman countered concerns over the delay, indicating that clear and unambiguous standards are required in the US for those who must apply and enforce those standards.
She also stressed that accounting standards must be capable of rigorous interpretation and application so that similar events and transactions are accounted for similarly across time periods and among companies; US preparers and auditors are expected to apply the standards as written and US financial reporting stakeholders demand clarity from somebody and it is therefore in everyone's best interests to have an interpretive process conducted in a transparent way, rather than individually through audit or enforcement; US stakeholders frequently need support in interpreting standards, even after they have been issued; and that in the US, when a question arises about the intent of a standard or the application of a standard, the FASB or the EITF is expected to address it in a timely manner.
Seidman expressed the hope that the FASB work with the IASB to complete the Memorandum of Understanding projects, which address important, pervasive transactions.
For new projects, she said the FASB would like to be actively involved in discussions with the IASB and other standard-setters to continue to improve global accounting and to make those accounting standards more comparable.
This was first reported by CCH Accounting Research Manager
