The U.S. Securities and Exchange Commission (SEC) is weighing whether to
The U.S. Securities and Exchange Commission (SEC) is weighing whether to revisit a landmark 2007 decision that has allowed foreign companies listed on American exchanges to file financial statements under International Financial Reporting Standards (IFRS) without reconciling them to U.S. Generally Accepted Accounting Principles (GAAP).
The accommodation, granted nearly two decades ago, was designed to lower costs for foreign private issuers and attract more international listings to U.S. markets. It has since been used by hundreds of companies, particularly from Europe, Canada, and Asia, which prepare their accounts under IFRS as issued by the International Accounting Standards Board (IASB).
But SEC Chair Paul Atkins told the Financial Times that the time may have come to reassess whether the rule still serves U.S. investors and markets. He cited three areas of concern:
First, the funding and governance of the IASB itself. “Stable, independent financing is essential for investor trust,” Atkins said, questioning whether the IFRS Foundation—the body overseeing the IASB—has the independence and resources to maintain credibility.
Second, the growing reach of the IFRS Foundation into environmental, social, and governance (ESG) reporting has raised red flags for the SEC and runs contrary to U.S. politics. The IFRS’s newly created International
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