![]() multinational companies with subsidiaries outside the United States are also often permitted – or required – by other countries to use IFRS for statutory financial reporting requirements for those subsidiaries. ![]() companies look to IFRS when preparing financial information for management and boards of directors. companies and other parties that apply IFRS. companies also rely on IFRS financial statements when entering into transactions with non-U.S. companies, for example, make acquisitions and enter into joint ventures relying on IFRS financial information. GAAP, it is not to the exclusion of IFRS. interest in high-quality, globally accepted accounting standards is not limited to market investing. mutual funds that hold debt and equity securities issued by companies based outside the United States, many of which operate in the jurisdictions that have incorporated IFRS into their reporting regimes. investors have, for example, invested $4 trillion in U.S. investors also routinely invest in companies based outside the United States and registered in non-U.S. ![]() As of September 2016, these companies alone represented a worldwide market capitalization in excess of $7 trillion across more than 500 companies. investors make many investment decisions using financial statements of foreign companies that apply IFRS issued by the IASB, investing directly in the securities of many foreign private issuers that apply IFRS in filings with the Commission. Interest in High-Quality, Globally Accepted Standards ![]() investors and companies and the strength of our markets. It is imperative for the protection of U.S. I urge the next Chair, working together with a full Commission, to speak again on this issue and agree on a path forward to most effectively advance this critical objective. investors of high-quality, globally accepted accounting standards, and I believe that the Commission must continue to pursue such standards as one of its highest priorities. As I approach the end of my tenure, I remain firmly convinced of the importance for U.S. OCA has spent considerable time reviewing the extensive prior work on globally accepted standards, considering the experience with the FASB and IASB convergence projects and the application of IFRS by foreign private issuers. financial reporting system – an issue identified for further consideration in 2010.Įarly in my tenure as Chair, I directed our Office of the Chief Accountant (OCA) to review the Commission’s views on these issues and engage in broad outreach with investors, preparers, auditors, standard setters, and others. While there has been no formal action by the Commission since, I have strongly urged engagement on this issue by the Commission, including on whether to further incorporate International Financial Reporting Standards (IFRS) into the U.S. ![]() The Commission has long promoted high-quality, globally accepted accounting standards, formally advocating them for almost 30 years, including in 2010, when the Commission last reaffirmed the importance of pursuing such standards to further our mission. Standard setters and the Commission also have a strong interest in building and maintaining high-quality standards that can be applied comparably across borders to better inform and protect investors. Global standards facilitate decision making about cross-border investments, transactions, and acquisition opportunities. investors and companies, have a very strong interest in such standards. GAAP continues to serve well the interests of investors and others stakeholders, it does not diminish the need – in the United States and abroad – to continue to work hard to support the development of high-quality, globally accepted accounting standards. They are established and maintained by an independent standard-setter, the Financial Accounting Standards Board (FASB). Generally Accepted Accounting Principles (GAAP) are the accounting standards forming the bedrock of the U.S. The Commission has an important responsibility to investors and our markets to ensure that the accounting standards reliably produce the information our markets demand. High-quality accounting standards are the foundation upon which this reliance is built. capital markets depends on investors knowing that they can rely on the financial information that is available to them when they make investment decisions. ![]()
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