SEC Corp Fin Director John White told FEI’s IFRS conference earlier today (June 5) that the SEC is working on the IFRS roadmap –‘it is not one of those back burner projects – it’s happening” Noting that confirmation hearings for three new Commissioners took place earlier this week, he emphasized “there will be five people voting – we have to get everybody in place” before proceeding on this major initiative. [UPDATE June 6: White's speech has been posted here: http://www.sec.gov/news/speech/2008/spch060508jww.htm ]
“We are taking this journey with the new roadmap with three new commissioners,” White said, adding, “we on staff will have to begin to understand their views.”
In a meeting with the press following his formal remarks, White explained the roadmap will not be proposed rulemaking per se, although proposed rulemaking may be one of the signposts along the roadmap. Asked during the press session if the SEC will have a 'quiet period' in rulemaking, given in part the White House memo directing federal agencies planning to issue proposed (final) rules by June 1 (with a later date for final rules), White said "We anticipate continuing going on with business as usual," noting there are a number of proposed rules currently out for public comment relating to foreign issuers, as well as a concept release on oil and gas, and the recent XBRL rule proposal, on which he said, "I have every expectation XBRL rule will be adopted before the end of the year."
White outlined a number of key questions being considered within the halls of the SEC – including whether IFRS should be permitted or required, whether all public companies should be under the scope of the IFRS option or mandate, or a subset of companies, and timing and transition issues.
Some time ago, noted White, some may have entertained the ‘dream’ that U.S. GAAP would become the global standard. However, with more than 100 countries requiring or permitting IFRS, he said some may see it as ‘an inconvenient truth,’ but those people ‘need to wake up from that dream’ of the single global standard being U.S. GAAP, and recognize the global movement is to IFRS. He reiterated the aim has been to achieve a single set of high quality standards that are globally accepted.
He noted the SEC has been actively involved, including with international counterparts at IOSCO, and through agreements like the SEC-CESR workplan, in sharing the results of reviews of IFRS filings, and in discussing issues like enhancing the governance of the IASB.
Separately, White noted that the SEC will be posting, possibly as early as today, a paper describing how to deal with the Corp Fin review process, including issues such as how to proceed from Corp Fin review to take up matters with the Office of the Chief Accountant, if applicable. He emphasized that the objectives of the review process as applied to IFRS filings are consistent with that of the review of U.S. GAAP filings. UPDATE: Here is a link to the doc referenced by White, posted today (June 5): "Division of Corporation Finance - June 2008: Filing Review Process."
FEI President and CEO Michael P. Cangemi, introducing White, noted that FEI has focused on keeping its members educated on IFRS and other financial reporting matters, as well as the other needs of companies, including operational issues.
Some of these initiatives at FEI include the creation of an IFRS focused subcommittee within FEI’s Committee on Corporate Reporting (CCR), and the announcement today that FEI has led the formation of a new national coalition, the Corporate Roundtable on International Financial Reporting (CRIFR), to provide a forum for companies of all sizes and funding models to discuss all business issues related to the promulgation, implementation and convergence of IFRS by U.S. companies. CRIFR’s charter members include FEI, Eli Lilly, Honeywell, McGraw Hill, Source Technologies, SMSC and Tyco. See the FEI press release.
Today's conference, "The World Is Moving to IFRS - Are You?" was hosted by Financial Executives International (FEI), and exclusively sponsored by BNA Tax & Accounting.We’ll have more highlights from panels that followed John White's keynote in subsequent posts.
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