This Wednesday, the SEC will finally let us know a date for US Companies to be allowed to start using IFRS as their reporting standards. It’s essentially going to be a roadmap that the SEC commissioners will consider, and then of course open it up to the public and watch the fireworks begin.
They also plan to consider proposing several amendments to various rules and forms that would allow “a limited number of U.S. issuers” to prepare their financial statements using IFRS rather than GAAP earlier than expected date. This would only cause more of an uproar, but what the hell?? It’s only costing companies hundreds of millions of dollars right? What’s a few more sticks on the fire??
Ever since the SEC began allowing foreign companies to submit their SEC-prepared filings without reconciling them with GAAP, companies, academics, and accounting firms have been anxiously waiting to hear when US publicly traded companies would be given the same function. In the meantime, it seems that accounting firms have been telling their clients that an SEC mandate for IFRS use is inevitable. In Europe, companies were given 3 years to change over their reporting systems to IFRS. This was finally completed in 2005. The SEC somehow thinks that the largest of U.S. registrants could make a similar conversion by 2011. In that same year, Canadian, Indian, and Japanese companies are expected to begin using the global standards as well.
Many accounting firms also have come out to say that the year 2013 could be cited by the SEC as an IFRS-switchover date for large U.S. companies, and that 2015 being the deadline for small companies to begin using IFRS. While IFRS is currently the most popular accounting language worldwide, it never has settled well with many of the accounting experts in the United States. Many say that its more principle based and than GAAP, which gives accountants more guidance for each of its rules.
It seems for years now, the two accountant boards have been trying to meld together a single form of accounting language that could be multi-national and globally accepted. Many compared it to either dogs and cats working together, and even lions and rabbits sharing a bowl of cereal. It’s never going to happen without a lot of blood shed and a few burps.