Early IFRS Adoption: Is it for you?

The SEC has made it possible for approximately 110 large accelerated filers to convert to IFRS beginning after December 15, 2009. To adopt early, a company must meet both of the following criteria (As used below, industry is defined by the first two digits of a company’s SIC code with respect to the criteria below):

• IFRS would have to be the most-often-used set of standards by the 20 largest companies in an entity’s industry. An example of an industry meeting this rule would be one where eight use IFRS, seven use US GAAP and the remaining use other country GAAP (i.e. Chinese GAAP, Australian GAAP etc.)
• The entity must be among the largest 20 public companies by market capitalization in its industry.

Companies may confirm that they qualify for early adoption by requesting from the SEC a letter of no-objection to file using IFRS as issued by the IASB

There could be benefits of adopting early including:

• Benefiting early from the cost savings of a truly global finance function
• Beginning to implement streamlined global processes and procedures
• Benefits of globally comparable financial results across the organization
• Common technology development
• Sharing resources globally across the organization

There could be other benefits as well including improved financial results from the change in to principles based accounting standards, improved access to global capital markets, streamlined M&A activities, streamlined audits, simplified global tax planning, etc.

Are you ready to adopt IFRS…early?