On December 21, 2007, the Securities and Exchange Commission published final rules adopted on November 15, 2007 regarding the acceptance in SEC filings by foreign private issuers of financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) without reconciliation to U.S. Generally Accepted Accounting Principles (GAAP).
In response to questions, the SEC staff has advised companies that until this new rule is effective on March 4, 2008, they are subject to the existing rules regarding the inclusion of GAAP information in filings with the SEC. However, the SEC staff is aware that some foreign private issuers with a fiscal year ending after November 15, 2007 that prepare their financial statements using IFRS, as issued by the IASB, will want to file their annual report on Form 20-F before March 4, 2008 and exclude GAAP information from that filing. The SEC staff does not want to discourage companies from filing their 20-F before March 4, 2008. Accordingly, these companies are encouraged to contact the staff in the Division of Corporation Finance to discuss this issue. These companies can contact either Craig Olinger – Deputy Chief Accountant (202-551-3547) or Wayne Carnall — Chief Accountant (202-551-3107) to discuss their particular facts or circumstances.
The SEC staff also noted that these final rules provide similar relief from the requirement to provide GAAP information if the financial statements are filed under Rules 3-05, 3-09, 3-10 and 3-16 of the Securities Exchange Act of 1934. Similarly, companies that intend to file financial statements with a fiscal year ending after November 15, 2007 that are prepared using IFRS, as issued by the IASB, that exclude GAAP information in a filing under the Exchange Act before March 4, 2008 are encouraged to discuss their fact pattern with the SEC staff.
Those companies seeking relief from the existing rules will need to make the request in writing. Companies are encouraged discuss any other implementation issue with the SEC staff.