Thursday, April 24, 2008

European Commission Legis. on Equiv of GAAP to IFRS, U.S. SEC Action on IFRS for U.S. Co's Expected Within Weeks, Some Say

Earlier this week, the European Commission (EC) announced that it intends to propose legislation “within the coming weeks” for a finding of equivalence between IFRS and U.S. GAAP, as well as certain other 3rd country GAAPs. A working paper details the basis of this decision, detailing major differences between certain GAAPs and IFRS in an Annex taken from the recent advice (report) of the Committee of European Securities Regulators (CESR) which we previously reported on here.

Additionally, although the EC acknowledges the US SEC's decision last fall to drop the IFRS reconciliation requirement for countries that report in IFRS as published by the IASB – which included a transitional carve-out for the major difference between IFRS “as adopted by the EU” (re: IAS 39), the EC states: “The European Commission continues with its objective for seeking removal of this reconciliation requirement for all European issuers using IFRS as adopted by the EU. Efforts need to continue to resolve the issue of the carve-out of IAS 39. In this context the Paper calls on the IASB to play a full role."

Hat tip to Joe Kirwin of the Bureau of National Affairs (BNA) who wrote about this development yesterday in his article in BNA's Daily Report for Executives, "European Commission Planning Legislation To Give IFRS Equal Status With U.S. GAAP." BNA does a great job of covering accounting developments on the U.S. and international scene; see these products offered by BNA Tax & Accounting, exclusive sponsor of FEI's upcoming IFRS conference described below.

SEC Rule Proposal on Use of IFRS by U.S. Companies is Expected "In the Next Few Weeks," Says KPMG Chairman, Announcing Formation of IFRS Institute
In announcing the formation of the KPMG IFRS Institute. KPMG Chairman & CEO Tim Flynn stated: "The question about whether the world is going to global standards is no longer ‘if,’ but ‘when.’" Flynn added, "The Securities and Exchange Commission (SEC) is expected to issue a rule proposal in the next few weeks outlining the manner, timing, and eligibility for some U.S. public companies to transition from U.S. Generally Accepted Accounting Principles (GAAP) to IFRS." and were among the first to note the announcement of the formation of KPMG's IFRS Institute.

The KPMG IFRS Institute is the latest in a series of institutes formed by KPMG, including their Audit Committee Institute and [Sarbanes-Oxley Section] 404 Institute. A May 1 webcast is planned, further info is at

Other firms offering IFRS resources online include Deloitte's, which has a great deal of information about IFRS developments. E&Y has IFRS info here, and PwC has IFRS info here.
Bruce Pounder, CEO of Leveraged Logic provides info on his IFRS convergence training and services here.

We will add links to other websites with IFRS info, feel free to email me or post a comment if you have one to recommend.


Separately, the upcoming (May) issue of Financial Executive Magazine features interviews with KPMG International Chairman Tim Flynn, Grant Thornton CEO Ed Nusbaum, PwC U.S. Chairman and Senior Partner Dennis Nally, Deloitte CEO Barry Salzberg, and Ernst & Young Chairman & CEO James Turley in Executive Editor Ellen M. Heffes' Financial Reporting column entitled: "Global Accounting Firm CEOs on Challenges - Transitionaing from GAAP to IFRS - and More." We will update this post to link to the article on May 1.Additionally, see PwC U.S. Chairman and Senior Partner Dennis Nally's remarks delivered at the NYC Chapter of FEI in March, in which he called for a move from U.S. GAAP to IFRS. E&Y's Turley had a similar message in his WSJ oped last fall, "Mind the GAAP." Separately, Compliance Week reported this week, in an article by Tammy Whitehouse, "PCAOB Ponders Global Auditing Standards," reporting on this April 11 speech by PCAOB Board Member Bill Gradison at the American Accounting Association.

More opportunities to learn about IFRS can be found at these conferences:

  • FEI June 5 conference in NYC: "The World Is Moving To IFRS - Are You?" Hear the latest on the status of SEC rulemaking relating to IFRS for U.S. companies from SEC Corp Fin Director John White, gain insights on IFRS from leading financial executives, auditors, and other experts. Space is limited, register now, see speakers and agenda here . BNA Tax & Accounting is the exclusive sponsor of this conference.
  • FAF-FASB June 16 Forum at Baruch College: "High-Quality Global Accounting Standards: Issues and Implications for U.S. Financial Reporting." Space is limited, a live webcast will also be available, see details here.

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1 comment:

My Blog said...

Efforts need to continue to resolve the issue of the carve-out of IAS 39. In this context the Paper calls on the IASB to play a full role.