On April 24, the Securities and Exchange Commission announced a series of actions it intends to take relating to the acceptance of financial reporting in International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB).
The SEC anticipates issuing a Proposing Release this summer that will request comments on proposed changes to the SEC’s rules to allow the use of IFRS in financial reports filed by foreign private issuers that are registered with the SEC. The proposed rule would allow foreign private issuers to choose between following IFRS or generally accepted accounting principles (U.S.GAAP). In addition, the SEC plans a Concept Release relating to issues surrounding the possibility of treating U.S. and foreign issuers similarly in this respect by also providing U.S. issuers the alternative to use IFRS.
The SEC’s rules currently 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 SEC’s planned proposal this summer would address eliminating that reconciliation requirement with respect to financial statements filed in IFRS beginning in 2009. Comments on both releases would be due in the fall.