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Transition Timeline

November 9, 2008

The proposed SEC rule would require large accelerated filers to convert from US GAAP to IFRS by the 2014 10-K filing deadline. Accelerated filers and non-accelerated filers would follow in 2015 and 2016, respectively. Using the large accelerated filers as an example, the rule would require three years of comparitive financial results (2012, 2013 an 2014) and an audited reconciliation of the 2011 US GAAP balance sheet to IFRS. Most experts agree that the transition will take from three to five years so it would be best to begin preparations no later than 2010. With that in mind and realizing that it may be wise to have some sort of parallel accounting for the three comparative periods (2012, 2013 and 2014), it seems prudent to begin making preparations in 2009. Outlined below is an example timeline and some topics to consider addressing during the transition period.

  • 2008: Watch for the issuance of the final SEC rule requiring IFRS
  • 2009: Stay IFRS aware, perform an IFRS Impact Assessment to see what impact the IFRS transition may have on your business; consider forming a steering committed and focused teams to address and manage the transition.
  • 2010-2013: Teams should address the impact to corporate governance, stakeholder education, accounting, impact of IFRS 1, finance, debt covenants, financial and other legal instruments, incentive compensation, M&A activities, human resource needs, as well as shareholder and analyst communications.
  • 2012-2014: Consider some sort of parallel accounting during the transition period.
  • 2014: Complete transition effort and file first IFRS 10-K

The SEC should issue its final IFRS transition rule soon (it was reported that they would do so last Friday). Stay tuned…

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