Is The IFRS "Condorsement" Coming? Maybe: It’s been four years since the Securities & Exchange Commission first floated the idea of permitting U.S. companies to use international financial reporting standards (IFRS) for their filings. In between 2007 and now, a two-year financial crisis distracted the SEC, the Financial Accounting Standards Board, and the International Accounting Standards Board, hobbling any plans for a quick changeover to a one-world set of standards.
That “one-world set of standards” may have always been more ambitious than it first sounded. Some countries have chosen to carve out parts of IFRS that they don’t see fit to adopt. Some adopting IFRS have done so with significant strings attached: for instance, reserving the right to not adopt a new IASB pronouncement if it doesn’t seem particularly relevant to that country’s constituents. While the international convergence movement has taken on a life of its own, some of the developing adoptions are more like mutations of IFRS rather than a uniformly-created single set of standards.
Whether homogenized standards are a good idea or not, or whether countries go the full convergence route or merely adopt some form of convergence to look like they’re in the game, the SEC has committed itself to figuring out the United States’ position on adopting IFRS. The Commission’s latest effort is a staff paper explaining “condorsement” - a possible way of incorporating IFRS into the American reporting system. As you might expect from the name, it’s not a pure adoption approach to implementing IFRS.