SEC: Companies Will Need Time to Adopt International Financial Reporting Standards (IFRS)
SEC Chairman Mary Schapiro announced on December 6, 2010, that public companies will be given at least four years to adjust to International Financial Reporting Standards (IFRS) if the SEC should decide to require the standards, according to the article in the Journal of Accountancy, “Schapiro, SEC Staff Want Companies to Have Ample Time for IFRS Adoption.” While as of now the SEC plans to vote on whether or not to adopt IFRS in June 2011, it is not set in stone, the article reports.
It appears, however, that many are not sure that IFRS should be adopted as is. According to a lot of folks in the accounting world, IFRS standards should be adopted in a piecemeal fashion or adopted as suggested standards. According to the Deputy Chief Accountant Paul Beswick: “The majority of jurisdictions are following the convergence or endorsement approach. The U.S. should move to something in between –‘condorsement.’” In other words, they want to ensure that the standards are “high quality.”
The article explains how this would work:
“Under this method, U.S. GAAP [Generally Accepted Accounting Principles] would continue to exist and the International Accounting Standards Board (IASB) and FASB [Financial Accounting Standards Board] would continue to work on their convergence projects. Additionally, FASB would work to converge existing GAAP to IFRS over a period of time for standards that are not on the current convergence agenda. This would help to ensure existing standards are appropriate for U.S. companies on a standard-by-standard basis, according to Beswick. Then when the IASB issues new standards, FASB would decide whether to incorporate or endorse [but not require] them.”
These changes, if and when enacted, are likely to require accountants to use certified appraisers.
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By: Present Value
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