The SEC has published a paper, "Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers: Exploring a Possible Method of Incorporation,” which outlines a possible approach for incorporation of IFRS into the U.S. financial reporting system, if the SEC were to decide that incorporation of IFRS is in the best interest of U.S. investors. The approach outlined in this paper is based on the following principles:
1) U.S. GAAP would be retained, but the FASB would incorporate IFRS into U.S. GAAP over a defined period of time, with a focus on minimizing transition costs, particularly for smaller issuers.
2) The FASB would incorporate newly issued or amended IFRSs into U.S. GAAP pursuant to an established endorsement protocol. This would require a change to how the FASB currently operates.
3) Similar to other jurisdictions, the endorsement protocol would provide the SEC and the FASB the ability to modify or supplement IFRS when it would be in the public interest and necessary for the protection of investors.
For more information about IFRS, visit our IFRS Resource Center.
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