For those waiting on the status of the SEC's IFRS roadmap, last week brought big news. Speaking at two separate gatherings, SEC chief accountant James Kroeker said the roadmap would be an important priority this fall. Chairwoman Mary Schapiro, speaking to a group at Georgetown University McDonough School of Business, said it would be ideal to have a single set of high-quality global accounting standards and we should hear something later this fall about the Commission's expectations with respect to IFRS.
This week, leaders from the G20 nations will meet in Pittsburgh. In previous meetings, G20 leaders have called for significant progress toward a single set of global accounting standards. This meeting will be especially interesting, given pressure from the banking industry and European officials on the direction standard setters are taking on fair value reform. Recently, the French Finance minister urged rejection of IASB proposals on fair value reforms if the IASB does not make changes. Both James Kroeker and Mary Schapiro have expressed concerns that accounting convergence, especially a rush to convergence, can create a race to the bottom.
There are tremendous crosscurrents now. While many expressed support for movement toward a single set of global standards in comments on the SEC roadmap, Mr. Kroeker said many were “fairly downbeat” about being able to adopt IFRS in the near term. However, the time left for more convergence seems limited. The Federation of European Accountants has called on the IASB to end its convergence program with the United States. Sir David Tweedie, chair of the IASB, said continued convergence would be difficult after 2011 if the U.S. does not commit to IFRS by 2011. Earlier this year, Financial Accounting Standards Board chairman Robert Herz said that convergence of both sets of standards could take 10 to 15 years.
Until last week, these debates have been occurring with little insight of when the SEC might take action on its roadmap. Now we know. I wonder which direction the SEC will take us. What do you think will happen?