Last month, the United States Securities and Exchange Commission (“SEC”) issued a release (“Release”) setting forth a roadmap (“Roadmap”) for the potential use by U.S. issuers of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, rather than statements prepared in accordance with U.S. GAAP accounting standards. The SEC believes that, as capital markets become increasingly global, a single set of accounting standards would benefit investors by enhancing the ability to compare financial information of U.S. and non-U.S. companies. The SEC further believes that IFRS “has the potential to best provide the common platform” for such comparison.
This Roadmap describes seven milestones which, if achieved, could lead to the use of IFRS. These milestones relate to:
- improvements in accounting standards;
- the accountability and funding of the International Standards Committee Foundation;
- the improvement in the ability to use interactive data for IFRS reporting;
- education and training relating to IFRS;
- limited early use of IFRS where this would enhance comparability for U.S. investors;
- the anticipated timing of future rulemaking by the Commission SEC
- the implementation of the mandatory use of IFRS by U.S. issuers.
The Release seeks comment with respect to the Roadmap. It also seeks comment on two alternate proposals under which U.S. issuers that elect to use IFRS would disclose GAAP information. Comments will be accepted until February 19, 2009.