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Sept. 27 — The Securities and Exchange Commission isn’t showing any movement toward acceptance of international accounting standards for financial reporting by U.S. public companies, the chairman of the International Accounting Standards Board told Bloomberg BNA.
“I don’t think we can expect any news from that front,” Hans Hoogervorst said in a brief interview in London Sept. 27.
He also suggested that a number of large U.S. companies that had been preparing for a shift to the IASB’s international financial reporting standards changed course because the idea of the SEC embracing IFRS was “politically dead.”
“Why would they go on thinking about it?” Hoogervorst asked. Ford Motor Co. was one such company, according to sources who follow international accounting issues.
The SEC has stated its commitment to moving to a single set of a high-quality accounting standards suitable for global use to aid in cross-border capital raising.
However, the road to convergence of IFRS and U.S. generally accepted accounting principles has been rocky. What was once considered likely some six years ago—U.S. adoption of the international rules —now seems highly improbable in the near term, even in a more modest voluntary, disclosure-only form to accompany filings under U.S. generally accepted accounting principles.
In late 2014, the SEC’s chief accountant had proposed an option for U.S. companies to supplement their reporting under GAAP with IFRS-based disclosures (11 APPR 26, 12/18/15), (236 DTR G-2, 12/9/14).
The idea doesn’t show signs of gaining traction, despite comments by James Schnurr, the commission’s top accountant, last year that reports of IFRS’s death in the U.S. as premature (11 APPR 557, 6/19/15).
The funding picture for the IASB and its parent group, the IFRS Foundation, “has improved markedly” over the last five years, Hoogervorst told Bloomberg BNA at a meeting of World Standard-Setters, which gathers annually under the board’s auspices.
“We’re in much better shape,” said the IASB chairman. “We have kept costs down and revenues have been stable.”
He suggested that the foundation is well on its way to have an amount of cash in reserve to cover one-year’s expenses. Hoogervorst said the foundation had been striving toward that goal.
In June, the foundation trustees proposed that the number of IASB members be reduced from 16 to 13 (12 APPR 12, 6/17/16).
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