After the SEC staff released its final report on IFRS convergence this summer—essentially backing off any strong endorsement, let alone implementation—the IFRS foundation (the parent of the International Accounting Standards Board) fired back with its own 84-page work plan for “incorporating IFRS into the financial reporting system for U.S. issuers.”

“The publication of the SEC Staff Report represents an important milestone for the SEC on its multi-year evaluation of International Financial Reporting Standards (IFRS),” the report begins. After reciting the long road toward convergence—starting with the SEC’s first efforts in 1973 to help create an international standards-setting committee and culminating with its 2008 “roadmap” for convergence—the report reviews “a range of studies that point to benefits from mandatory adoption of IFRS,” such as the improved efficiency of capital markets and cross-border investments. It also addresses the SEC’s most significant concerns, in particular the funding of the foundation as well as the costs of transition.

However, most of these concerns “are not unique to the U.S.,” the report concludes. Although the size of the U.S. economy is certainly an important factor to consider, “the experience of other countries suggests that many of the challenges can be overcome with the appropriate political will to make a commitment to the mission of a single set of global standards.”

Is the IASB in denial? “So sorry to have to break it to the IASB staff, but they are deluding themselves. The reality is that the FASB believes that U.S. GAAP is better,” says an online article, “The IASB Stages of Grief”:

The IASB must surely understand that the SEC staff's backtracking has posed an existential threat—if not to the IASB's existence, then at least as the standard setter for the U.S. and Europe. After Europe finds that working with an IASB that doesn't control the U.S. does it no good, then it will be all over but the shouting. The next step down will be for every other country with mature standard-setting mechanisms to revert to their old ways, and the IASB will find itself where it was about twenty years ago—where only smaller economies will require companies to represent full compliance with IFRS, and everyone else will pick up the rules they like and leave the rest.