What's the latest on the SEC's decision on IFRS

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What's the latest on the SEC's decision on IFRS Resources Global Professionals Finance & Accounting Blog Thursday, October 20. 2011 What's the latest on the SEC's decision on IFRS The SEC is expected to make a decision this year as to when and how the US may move to International Financial Reporting Standards. With everything going on with the economy, and the SEC's preoccupation with everything Dodd-Frank and enforcement - the IFRS decision has not been a priority.

The SEC staff did issue a discussion document asking for comments about a proposed way to move forward in May of this year. The so-called "condorsement" approach was first floated at the December 2010 AICPA SEC conference. Essentially, it is a hybrid of ongoing convergence of US GAAP and IFRS and an endorsement protocol. The proposed approach would retain US GAAP. This would solve many of the regulatory issues where US GAAP is referenced in state and federal codes (such as the tax code!). IFRS would be incorporated into US GAAP over a defined period of time. Perhaps 5 to 7 years.
FASB would incorporate newly issued or amended IFRSs into US GAAP pursuant to an established endorsement protocol.
The protocol would provide the commission and the FASB the ability to modify or supplement IFRS when in the publics’ interest. The approach would include a transitional period during which existing differences between IFRS and US GAAP would be eliminated through ongoing FASB standard setting efforts. The approach seems to have some legs - it would certainly be more cost effective and a smoother transition for companies.

The AICPA and others have also asked that companies be able to outright adopt IFRS on a voluntary basis. This may make more economical sense for those companies that are reporting both ways due to statutory reporting requirements! Additionally, it would be hard for the SEC to say no to this, as they already allow foreign private issuers the ability to file using IFRS.

More to come on the issue - we will keep you posted!
Posted by Colleen Cunningham at 10:15
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