In 2010, SEC Deputy Chief Accountant Paul Beswick introduced yet another possibility for convergence by stating that, although he had not made a final decision regarding the movement toward IFRS, he believed that the United States should not follow “the convergence or endorsement approach.” Rather, it should adopt a modified approach that he labeled “condorsement.” Under condorsement, U.S. GAAP would continue to exist, and the IASB and FASB would continue their convergence projects.
In addition, FASB would work toward convergence of existing U.S. standards not included in the convergence project to IFRS. This, according to Beswick, would ensure that existing guidance was appropriate for U.S. companies on a standard to- standard basis; when the IASB would issue new standards, FASB would decide whether to adopt them.
As described in a May 2011 SEC staff 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 …show more content…
First, the SEC and IASB would target the completion of their joint Memorandum of Understanding (MOU) projects in 2011; second, FASB would assess the IASB’s ongoing and anticipated standards-setting projects, while retaining U.S. GAAP until their completion; and third, FASB would assess “static” IFRS (those not included in the MOU projects and not on the IASB agenda) and execute a transition plan for their incorporation into U.S. GAAP. This strategy would have the advantage of avoiding what the SEC has referred to as the “big bang” approach, under which U.S. issuers would have to absorb the entire body of international standards all at once. It also would retain U.S. GAAP as the statutory basis of financial reporting and place a moratorium on any new standards-setting projects by
In addition, FASB would work toward convergence of existing U.S. standards not included in the convergence project to IFRS. This, according to Beswick, would ensure that existing guidance was appropriate for U.S. companies on a standard to- standard basis; when the IASB would issue new standards, FASB would decide whether to adopt them.
As described in a May 2011 SEC staff 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 …show more content…
First, the SEC and IASB would target the completion of their joint Memorandum of Understanding (MOU) projects in 2011; second, FASB would assess the IASB’s ongoing and anticipated standards-setting projects, while retaining U.S. GAAP until their completion; and third, FASB would assess “static” IFRS (those not included in the MOU projects and not on the IASB agenda) and execute a transition plan for their incorporation into U.S. GAAP. This strategy would have the advantage of avoiding what the SEC has referred to as the “big bang” approach, under which U.S. issuers would have to absorb the entire body of international standards all at once. It also would retain U.S. GAAP as the statutory basis of financial reporting and place a moratorium on any new standards-setting projects by