The Latest on The SEC’s IFRS Roadmap
Last Updated – January 2011
In February 2010 the Securities and Exchange Commission (SEC) approved a roadmap for the possible adoption of International Financial Reporting Standards (IFRS) by U.S. based public companies as early as 2015. This roadmap calls for a decision by the SEC sometime in the second half of 2011. It should be noted that foreign private issuers (FPIs), or those foreign-based entities listed on U.S. capital markets already have the option of filing under IFRS. IFRS is already changing the reporting landscape in over 120 countries around the world and is already present on U.S. markets.
The SEC’s roadmap seeks to ensure that a single set of high-quality standards are in place prior to the potential move to IFRS. To access additional details on the roadmap please - Click Here.
As part of the work plan associated with the roadmap the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are meeting on a regular basis to work towards a common set of accounting standards. As of December 2010 some of the active projects included Conceptual Framework, Fair Value Measurement, Leases, Revenue Recognition and Investment Properties.
On December 6, 2010 at the AICPA’s National Conference on Current SEC and PCAOB Developments in Washington the head of the SEC, Mary Schapiro, indicated that in the event that an IFRS mandate is approved that the SEC will allow public companies a minimum of four years to make the adjustment – or no earlier than 2015 based on the SEC roadmap.
At the same conference, Paul Beswick, the SEC’s Deputy Chief Accountant, discussed the concept of “condorsement” which would build on the joint IASB and FASB activities whereby FASB could undertake further activities to potentially bring US GAAP in line with IFRS.
To read more about Schapiro and Beswick’s comments please - Click Here.
So, what does this mean for U.S.-based filers. Two words – More Change.
Whether US GAAP and IFRS are converged or converged to a point and then a transition to IFRS is undertaken it all means More Change. What the impact will mean for each issuer and the extent of the work effort will vary widely. Aside from any financial impacts and related adjustments, change can be expected in systems and data; the flow of some business activities; new disclosure requirements; internal controls; and, communication with external stakeholders such as investors and banking partners.
The IFRS PARTNER suite of products and related services is designed to help U.S. listed entities deal with these upcoming changes in a comprehensive manner to reduce convergence/transition risk and workload while improving project control, strengthening technical analysis, and reducing project costs.
To learn more about areas of impact please go to the next page entitled “IFRS – Major Impact Areas”