Condorsement Essay

1425 Words Apr 24th, 2013 6 Pages
Beswick's “condorsement” idea would infuse IFRS into U.S. Generally Accepted Accounting Principles by endorsing international standards one at a time while also continuing to converge them to GAAP. The Financial Accounting Standards Board would follow some established endorsement protocol for folding newly issued or amended international standards into GAAP, while also having the authority to modify or supplement them as the boards deems necessary. That would lead to a more gradual transition to IFRS with differences between IFRS and GAAP eliminated over time through further U.S. standard setting.

“Condorsement” - An Alternative Framework for IFRS in the United States
by Tim Foley

When the SEC discusses International Financial
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adopts each new standard…setting a clear and rigorous criteria for when a difference would ever be warranted…”

The staff paper comes with an abundance of qualifying statements, meant to convey the message that no decisions have been made and that the condorsement approach is but one of many possibilities. That said, it is apparent that the SEC is seriously considering this approach, one that would retain U.S. GAAP (if in name only), retain an important, ongoing role for the FASB, and would address many of the concerns voiced by practitioners by ensuring an orderly transition that would take place over a period of five to seven years. 

Other jurisdictions around the world have embraced IFRS in one of two general ways, by either full use (simply adopt IFRS as issued by the IASB) or through incorporation. Full use is rare as few jurisdictions have taken this approach. Those that have done so tend to be those countries with less developed internal accounting standards or policies. The more common incorporation approach takes into consideration national laws and regulations and considers IFRS on a standard by standard basis. Research shows that most jurisdictions apply the incorporation approach in one of two ways, convergence or endorsement. 

Convergence Approach – Keep national accounting standards but make every effort to eliminate material differences with IFRS over time. 

Endorsement Approach – Incorporate

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