[UPDATE 8PM EDT: Even later today, SEC posted a press release announcing the title of the August 4 roundtable as: "Roundtable on Performance of IFRS and U.S. GAAP During Subprime Crisis." It appears the description of the roundtable has evolved since the earlier descriptions in today's SEC News Digest (cited in the 5pm update below) and related Sunshine Act Notice from earlier this afternoon. Specifically, the scope of the Aug. 4 roundtable as described in the press release appears broader (by addressing U.S. GAAP as well as IFRS) and perhaps in some ways narrower (since the press release does not explicitly state the roundtable will include an "open discussion on International Financial Reporting Standards (IFRS)" and an "update on IFRS developments" as described in the earlier documents; although I would venture to guess its 'more likely than not' the SEC will use this platform as an opportunity to provide an update on their development of the 'IFRS roadmap' discussed further below.] [UPDATE 5PM EDT: This afternoon, the SEC announced (in today's SEC News Digest - thank you Securities Mosaic for highlighting this development to subscribers): that it will hold a Roundtable on International Financial Reporting Standards (IFRS) on Aug. 4 at 1pm.]
SEC Chief Accountant Conrad Hewitt, in an interview published today in WebCPA.com, written by Liz Gold, Associate Editor, AccountingToday, said a proposal relating to the SEC’s International Financial Reporting Standards (IFRS) roadmap will be out “sometime before September 21.”
What could the September 21 date signify, I wondered? Is it related to the fact that the annual World Standard-Setters meeting will take place Sept. 11-12? Or that Sept. 21 is the International Day of Peace? Actually, I figured out it’s probably a backstop date as the last official day of summer, given that Hewitt told WebCPA’s Gold: “the commission planned on doing something this summer, in terms of a proposal and release and some kind of action by the commission on a roadmap-type approach,” and SEC Chairman Christopher Cox said in a June 12 speech that, “whether, and under what circumstances, U.S. issuers should be allowed to prepare their financial statements using IFRS…” is “…a vitally important topic the Commission is scheduled to take up in the form of a proposed rulemaking later this summer.”
While Sept. 21 may be a backstop, how soon could the SEC act? According to Jeff Minton, Chief Counsel in the Office of Chief Accountant, also interviewed in the WebCPA article, the SEC staff has been working on developing a recommendation relating to the IFRS roadmap since February, but, “until the total current four commissioners vote on it, then nothing has been issued yet.” Minton’s reference to ‘four commissioners’ is particularly interesting in that it could signal the SEC may act to release the proposal any time now, since they currently have four commissioners in place; with Elisse Walter having been sworn in on July 11, the commissioner count currently stands at four. The SEC awaits the swearing-in of 2 more new commissioners: Luis Aguilar and Troy Paredes, and Commissioner Paul Atkins, who stayed beyond the official end of his term in June pending arrival of the new commissioners, is reportedly leaving the SEC at the end of this month (as reported by Neil Roland July 9 in Investment News).
A concise description of the IFRS roadmap was given in this speech by SEC Corp Fin Director John White at FEI’s June 5 IFRS conference: “It is likely that this roadmap would formally propose a schedule and appropriate milestones for continuing the progress that the U.S. is making to more fully accept IFRS in this country, not just from foreign companies but also from U.S. companies.” White added, “I truly believe that the endpoint will be U.S. issuers using IFRS and that it is time to move in this direction.”
Similarly, Hewitt is quoted in WebCPA today noting that by 2011, over 150 counties are likely to be using IFRS, adding, “so something tells me that after 2011 the U.S. probably needs to mandatorily switch to IFRS, whether it be 2014 or whenever, to give the U.S. companies time.” He also indicated the roadmap involve various issues, and would extend beyond ‘current commission action.’ (Note, in that regard, the IFRS roadmap would be similar to the earlier ‘roadmap’ which addressed the question of foreign private issuers (FPIs) being allowed to file in IFRS in the U.S. without having to reconcile to US GAAP, a decision process initiated under then-Chairman William Donaldson and then-Chief Accountant Don Nicolaisen in 2005, and completed last fall, with the SEC’s decision to drop the reconciliation requirement for FPIs. Read more about these issues, including SEC’s consideration of a possible phase-in period, and possible consideration of offering optional adoption of IFRS prior to any mandatory date, in the WebCPA article.
IFRS resources: If you missed FEI’s June 5 IFRS conference, learn the latest about the status of convergence efforts at our annual Current Financial Reporting Issues (CFRI) Conference Nov.17-18 in NYC – speakers include the chairmen of the SEC, FASB and IASB. For even more detail on IFRS, sign up for the one day conference immediately following CFRI, “IFRS: Strategies for Adopting a Single Set of Standards,” Nov. 19 in NYC, sponsored by Deloitte. These conferences are described under “networking events” on www.financialexecutives.org. Also, check out the Corporate Roundtable on International Financial Reporting (CRIFR), launched in June.
Separately, one of the points noted by Hewitt in the WebCPA article in determining readiness of the U.S. for a switch to IFRS would be: “are the universities in the U.S. teaching IFRS? Is it on the CPA exam?” The American Accounting Association (AAA), the professional association of accounting professors in the U.S., is holding a number of sessions relating to IFRS at its upcoming annual meeting and CPE sessions in early August, and provides links to related resources (see AAA links).
SEC ‘Complexity Committee’ Posts Agenda, Revised Draft Final Report
In other SEC news, the “Revised Draft Final Report” of SEC’s ‘complexity’ committee, the SEC Advisory Committee on Improvements to Financial Reporting (CIFIR - chaired by Robert Pozen), was posted today in advance of CIFIR’s final meeting slated for this Thursday (7/31), along with the agenda for the meeting.
If you received this blog post from ‘a friend’ you can sign up here to receive it by email.
Print this post