SEC Considers IFRS, GAAP Filing Choices
The Securities and Exchange Commission announced its intentions to issue a ruling this summer designed to give foreign private issuers a choice between IFRS and U.S. GAAP. In addition, the SEC plans is considering providing U.S. issuers the alternative to use IFRS.
Current SEC rules require that foreign private issuers who report in IFRS, or any other non-U.S. GAAP, provide a reconciliation of those financial statements to U.S. GAAP. The planned proposal this summer would address eliminating that reconciliation requirement with respect to financial statements filed in IFRS beginning in 2009. This is consistent with the timetable set forth in the Roadmap in 2005.
Because the elimination of the reconciliation requirement will permit some, but not all, registrants to have a choice between IFRS and U.S. GAAP, it raises the question whether all registrants should be able to report under either IFRS or U.S. GAAP. The planned concept release will permit the SEC to gather more information on this subject.
"Whether foreign private issuers and ultimately U.S. companies should be permitted to use financial statements prepared using IFRS without the current reconciliation to U.S. GAAP are important policy questions for the Commission and U.S. investors," said SEC Chief Accountant Conrad W. Hewitt. "Mindful of the Roadmap, we are working expeditiously to develop our recommendations for the Commission to consider."