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A Certain Future for IFRS

November 10, 2009

The draft SEC Roadmap to IFRS has been issued and commented upon. Now it is time for the SEC to get to work on making its plans for IFRS clear. Based on recent comments by Chairman Shapiro and Chief Accountant Kroeker, they appear to be moving toward providing clarity on IFRS.

Specifically, SEC Chairman Schapiro revisited the IFRS issue on Sept. 18 when she stated, “I expect we will speak a little later this fall about what our expectations are with respect to IFRS”. She also said “it would be ideal if we can have a single set of high-quality accounting standards that worked globally.” SEC Chief Accountant James Kroeker bolstered her remarks on October 30 at a premier US Conference on International Financial Reporting Standards. During his speech and responding to questions afterward he commented that “There will be follow-up on the roadmap this fall.” Asked to define the word “fall,” he noted that “fall ends on Dec. 21”.

SEC’s Strategic Plan For Fiscal Years 2010–2015

In its strategic In June 2009, the U.S. Department of the Treasury published key objectives for reform of the financial regulatory system. (Financial Regulatory Reform: A New Foundation) Among other things, these reforms focus on raising international regulatory standards and cooperation, including working toward improvement of accounting standards in the wake of the credit crisis and the development of a single set of high-quality global accounting standards.

G20 Leaders

Chief Accountant Kroeker’s remarks contained similar themes as a recent G20 Leadership meeting where the G20 leaders called on international accounting bodies to “redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.” They also commented that the “International Accounting Standards Board’s (IASB) institutional framework should further enhance the involvement of various stakeholders.”

Whatever you think about IFRS, the future seems sure. The world wants a single set on high quality, global accounting standards and IFRS will be that standard (it already is for the rest of the world).

Prepare Now

What can you do to prepare? Here are a few ideas for your consideration.

  • Stay IFRS aware
  • Stay aware of SEC action on IFRS
  • Learn about the FASB and IASB Convergence efforts
  • Analyze the effects of stable, converged IFRS standards on your organization and follow progress on standards still being converged
  • Conduct an IFRS impact assessment
  • Begin to develop a Judgment Framework that can formalize your processes for making business judgments and accounting standard application judgments.
  • Identify internal and external talent that can assist in the transition to IFRS
  • Develop a high level plan for transitioning to IFRS
  • Begin to identify potential impacts to accounting, tax, technology and other business processes.
  • Look for ways to normalize global accounting policies, practices and procedures to reduce the cost of global financial and regulatory reporting. Consider utilizing technologies like XBRL

Are you ready to report results under IFRS?

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