SEC Moving Forward On IFRS

by Glen Shapiro, LawAndTax-News.com, New York

26 April 2007

The US Securities and Exchange Commission on Tuesday unveiled its forthcoming plans with regard to International Financial Reporting Standards.

Following up on its roundtable last month, the SEC announced a series of actions it intends to take relating to the acceptance of financial reporting according to International Financial Reporting Standards (IFRS), as published by the International Accounting Standards Board (IASB).

The Commission anticipates issuing a Proposing Release this summer that will request comments on proposed changes to the Commission's rules which would allow the use of IFRS in financial reports filed by foreign private issuers that are registered with the Commission.

The approach in the proposed rule would be to give foreign private issuers a choice between IFRS and US GAAP.

In addition, the Commission plans a Concept Release relating to issues surrounding the possibility of treating US and foreign issuers similarly in this respect by also providing US issuers the alternative to use IFRS. Comments on both proposals would be due in the fall.

"The next steps that the Commission is announcing today will keep us on course with the Roadmap announced in 2005," explained SEC Chairman Christopher Cox.

Pending public comments on the proposal, "we remain on track to eliminate reconciliation by 2009," Cox added.

Under current Securities and Exchange Commission rules, foreign private issuers who report in IFRS, or any other non-US GAAP, are required to provide a reconciliation of those financial statements to US GAAP.

The Commission's planned proposal this summer would address eliminating that reconciliation requirement with respect to financial statements filed in IFRS beginning in 2009.

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