View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
October 14, 2007

Standard setters disagree with PwC GAAP proposal

Standard setters disagree with PwC GAAP proposal

Foreign private investors (FPI) filing with the US Securities and Exchange Commission (SEC) should be allowed to reconcile any comprehensive basis of GAAP with IFRS as adopted by the International Accounting Standards Board (IASB), according to PricewaterhouseCoopers US (PwC).

FPIs currently have two options for filing with the SEC – either with US GAAP, or with any comprehensive basis of GAAP reconciled to US GAAP. The SEC has recently proposed a third way – IFRS as adopted by the IASB.

PwC SEC-FPI services group senior technical partner Wayne Carnall spoke of the PwC recommendation at the firm’s Meet the Experts event in London this month. Carnall said PwC welcomes the SEC proposal, but believes it would have limited effect because of the variances of IFRS worldwide.

Carnall said PwC’s suggested fourth filing option would mean that companies from countries that have local variations of IFRS would have either no reconciliation or easier reconciliation than they would have under US GAAP. He stressed the importance of making the US capital markets more welcoming, highlighting a decline in the number of European investors, which fell from 379 in 2001 to 223 in 2006.

Opposition to PwC proposal US Financial Accounting Standards Board chairman Bob Herz and IASB member Warren McGregor were strongly against the PwC proposal, suggesting it would hinder the conversion process.

Herz, speaking at Meet the Experts, said: “Personally, I think that [removing reconciliation with US GAAP] is the right method; to do otherwise would be to undercut the IASB.” He also suggested the US should set a timetable for adopting IFRS.

McGregor said PwC’s proposal would be counter-productive and could jeopardise the aim for a single set of global standards.

However, Carnall is not convinced people in the US want conversion, using the analogy of people perceiving themselves as under attack from “alien” Europeans.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy


Thank you for subscribing to International Accounting Bulletin