17 November 2008

SEC roadmap for the use of IFRS for US issuers

The SEC published its ‘Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by US Issuers’ that could lead to the required use of IFRS by U.S. issuers in 2014

The Roadmap also proposes early use of IFRS by a limited number of U.S. issuers, beginning with filings in 2010.

It addresses the basis for considering the mandatory use of IFRS by U.S. issuers and sets forth seven milestones which could lead to the use of IFRS by U.S. issuers in their filings with the Commission.

The Commission in 2011 would determine whether to proceed with rulemaking to require that U.S. issuers use IFRS beginning in 2014 if it is in the public interest and for the protection of investors to do so.

These milestones relate to:

Ø       improvements in accounting standards;

Ø       the accountability and funding of the IASC Foundation;

Ø       the improvement in the ability to use interactive data for IFRS reporting;

Ø       education and training relating to IFRS;

Ø       limited early use of IFRS where this would enhance comparability for U.S. investors;

Ø       the anticipated timing of future rulemaking by the Commission; and

Ø       the implementation of the mandatory use of IFRS by U.S. issuers.

The Roadmap also discusses how IFRS reporting by U.S. issuers may affect other participants in the capital markets. It is open for consultation for 90 days following publication in the Federal Register.

Roadmap

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