Fitch Ratings expects the U.S. will still move forward with plans to incorporate International Financial Reporting Standards (IFRS) into U.S. GAAP, although in a prolonged, cautious and incremental way, according to a new report.
 
Fitch believes a renewed emphasis on issuing converged, 'high quality' accounting standards and the need to re-expose updated proposals for comments has significantly slowed the completion of many accounting projects jointly initiated by FASB and the IASB. The major priority projects initially scheduled for a June 2011 completion are still at various stages of completion in 2012 and some will likely extend into 2013.
 
The SEC expects the standard-setters to complete, or significantly almost complete, the high-priority convergence projects before a decision is made on IFRS. 'Given the current pace of work on the major accounting projects, the SEC's decision on IFRS may not materialize until later in the year' said Olu Sonola, Senior Director in Fitch's Credit Policy Group.
 
Fitch also expects intensifying debate in 2012 as to how entities, mainly financial institutions, account for and disclose European debt exposures. The SEC recently 'encouraged' enhanced and more transparent disclosure of debt holdings for several European sovereigns, regardless of materiality.
 
'The call for additional detailed disclosure by the SEC should hopefully serve as a guide to companies using the IFRS framework -- even though they are not required to follow U.S. SEC guidance,' Sonola added.

Other key global accounting trends for 2012 include: closing the gap between FASB and IASB on fair value, revisions to leases and revenue recognition, and proposals for mandatory auditor rotation.
 
The full 'Accounting and Financial Reporting - 2012 Global Outlook' is available at ' www.fitchratings.com .'