SEC delays XBRL compliance for foreign private issuers that prepare their financial statements in accordance with IFRS

April 21, 2011 - Foreign private issuers that prepare the financial statements they file with the Securities and Exchange Commission (SEC) in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) have been granted a temporary delay in compliance with the requirements for filing Interactive Data Files in XBRL format in connection with financial statements they file with the SEC.

In a “no-action” letter dated April 8, 2011, Director Meredith B. Cross of the Division of Corporation Finance and Chief Accountant James Kroeker of the Office of the Chief Accountant advised that foreign private issuers that prepare their financial statements in accordance with IFRS will not be required to submit to the SEC and post on their corporate websites, if any, Interactive Data Files until the SEC specifies on its website an IFRS taxonomy for use by such foreign private issuers in preparing their Interactive Data Files. The “no-action” letter was written in response to a letter from the Center for Audit Quality (CAQ) regarding the CAQ’s concerns over the ability of foreign private issuers to meet SEC regulations for the preparation of Interactive Data Files.

Pursuant to SEC regulations, foreign private issuers that prepare their financial statements in accordance IFRS must begin to include Interactive Data Files with the annual reports on Form 20-F or Form 40-F they file with the SEC for fiscal periods ending on or after June 15, 2011. SEC regulations regarding the preparation of Interactive Data Files require issuers to use a taxonomy approved by the SEC, as specified on its website. As the SEC has not yet specified an IFRS taxonomy on its website, the SEC staff acknowledged that it is not currently possible for foreign private issuers reporting in IFRS to comply with SEC regulations regarding the preparation of Interactive Data Files.

On March 25, 2011, the IFRS Foundation finalized an IFRS Taxonomy 2011 that would be utilized by issuers following IFRS to prepare Interactive Data Files. However, the CAQ noted in its letter to the SEC staff that the IFRS Foundation is still undertaking to improve the IFRS Taxonomy 2011 to make it more useful to investors by addressing common reporting practices and industry specific disclosures. On April 8, 2011, the IFRS Foundation announced its intention to continue to enhance the IFRS Taxonomy 2011 to address these concerns in the coming weeks.

The SEC has not indicated a timeline in which it expects to specify an IFRS taxonomy on its website. Until such time as the SEC specifies a taxonomy, foreign private issuers following IFRS will not need to prepare and file Interactive Data Files.