U.S. stalls on accounting rules switch
WASHINGTON/LONDON (Reuters) - A top U.S. regulator on Monday added several more months to years of deliberation on whether the United States would switch to global accounting rules used in 120 countries.
The U.S. Securities and Exchange Commission (SEC) had said it would give more clarity by year-end on whether it will adopt IFRS rules authored by the International Accounting Standards Board (IASB).
But James Kroeker, chief accountant at the Securities and Exchange Commission (SEC), told an industry conference SEC staff need "a few additional months" to prepare their report.
He said he could not give a "precise schedule."
"I'm encouraged for the prospect of incorporation of IFRS," Kroeker said. "A grain of sand passing in the hourglass is nothing compared to establishing a strong and lasting framework."
Kroeker's comments are likely to increase frustration felt by some IASB members who have long wanted a clear signal from the United States on IFRS rules so that the board's work program can move on.
The IASB said it had no comment on Kroeker's remarks.
Earlier on Monday, IASB Vice Chairman Ian Mackintosh said the United States could opt for "big bang" wholesale adoption like in Canada, a flat 'No' or something in between.
"My betting is for something in between," he told a conference organized by the ICAEW accounting body in London.
Mackintosh noted an SEC paper outlining a possible system of so-called "condorsement" where each IASB rule is adopted individually rather than a wholesale switch -- an idea backed by the trustees of the U.S. Financial Accounting Standards Board (FASB).
"Probably the SEC will come out with some sort of exposure draft or consultative paper with their view forward," Mackintosh said.
The IASB will then have to decide, through consultation with its members, how to respond to the U.S. announcement and IASB Chairman Hans Hoogervorst will make an "important" speech to the U.S. conference on Tuesday, Mackintosh said.
Many big U.S. firms are keen to make the switch in order to cut reporting costs as they have subsidiaries across the world that file statements using IASB rules.
Smaller, domestic-focused U.S. companies and some vocal investor groups say IASB rules are not detailed enough. Many in Congress do not want to surrender regulatory sovereignty to a body based in London.
Accounting industry officials say the SEC will probably have to go beyond broad support to some sort of clear commitment and timeline to switch to IASB rules. This could be over several years and just for large companies.
CONVERGENCE DRAGS ON
Leaders of the Group of 20 economies (G20) want a single set of global accounting rules to make life easier for investors and regulators.
Getting the United States to sign up is just one step along the way and other countries are becoming impatient.
Asian members want the IASB to turn to their wishlist of rule changes after years of getting bogged down in negotiations with the United States.
An original convergence deadline of June 2011 was shifted to the end of this month but disagreements between IASB and FASB over key rules have pushed this back further.
G20 leaders in Cannes last month called for an update on convergence work in April 2012.
Mackintosh said there was a possibility of completing the main rules being converged by the end of next year and that many
in the industry want a period of reflection after they are implemented in 2015 or 2016.
(Reporting by Huw Jones in London and Nanette Byrnes in Washington; Editing by Sophie Walker)