It's all but official that the Securities and Exchange Commission will keep us guessing well into 2012 what, if anything, it will decide about the adoption of International Financial Reporting Standards in the United States.

James Kroeker, chief accountant at the SEC, said today at a national conference of the American Institute of Certified Public Accountants that his staff will take “a measure of a few additional months” to complete its work plan on a possible adoption of IFRS in the United States. He also noted the Financial Accounting Standards Board and the International Accounting Standards Board are way behind their original target date for completing nearly a dozen standard setting projects to eliminate major differences between U.S. and international accounting rules.

Those are key inputs the SEC has said it would consider in making a determination of when, if, and how to roll IFRS into U.S. capital markets. The SEC said in February 2010 the outcome of the staff work program and the convergence effort with would be key to reaching an IFRS decision in 2011. Kroeker noted his staff recently published two white papers as part of the work plan – one detailing where there are still important differences between U.S. Generally Accepted Accounting Principles and IFRS, and another exploring how faithfully IFRS is applied in jurisdictions where it is followed.

Still to come, however, the staff is working on developing an approach for the SEC to consider for how to adopt IFRS in the United States, Kroeker said. He didn't say whether it would depart from or expand on the staff's earlier paper, published in May, outlining the “condorsement” idea, an approach where the United States would continue to focus on converging GAAP to IFRS and adopting IFRS individually as they are deemed adequate for U.S. markets.  

“Given the number of things on our agenda, I can't give you a precise schedule,” Kroeker said, only assuring the staff will take the time it needs to assure the plan it recommends to the commission is thoughtful and careful. The framework the staff is developing would demonstrate a U.S. commitment to global standards, yet also assure the United States would retain a strong voice in establishing global standards, he said.

When the SEC had indicated it would target 2011 for a determination on IFRS, the FASB and IASB were on a fast track to complete their core projects to eliminate major differences between IFRS and GAAP by mid-2011. The boards have since narrowed their focus to three major projects – revenue recognition, leasing, and financial instruments.

While they are making significant progress on completing converged standards on revenue recognition and leasing, they are still struggling with how to get a converged outcome on financial instruments. “The boards are not aligned as it relates to their approaches to consider hedge accounting in the context of their financial instruments project,” Kroeker said. “Numerous conceptual operational and practical questions raised about the proposal to date that I believe should be considered by both boards jointly.”