Friday, October 29, 2010
The SEC's Office of the Chief Accountant and Division of Corporation Finance today published their first progress report on the Work Plan related to global accounting standards. The Commission directed agency staff earlier this year to execute the Work Plan to provide the information needed to evaluate the implications of incorporating International Financial Reporting Standards (IFRS) into the financial reporting system for U.S. issuers. The Commission indicated that following successful completion of the Work Plan and the convergence projects of the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), it will be in a position in 2011 to determine whether to incorporate IFRS into the U.S. financial reporting system.
The Work Plan addresses six key areas:
- Sufficient development and application of IFRS for the U.S. domestic reporting system.
- The independence of standard setting for the benefit of investors.
- Investor understanding and education regarding IFRS.
- Examination of the U.S. regulatory environment that would be affected by a change in accounting standards.
- The impact on issuers both large and small, including changes to accounting systems, changes to contractual arrangements, corporate governance considerations, and litigation contingencies.
- Human capital readiness.
The SEC staff expects to continue to report periodically on the status of the Work Plan in 2011.