Indications from colleagues across the pond are that the US is really gearing up for IFRS. I hear that our clients over there are keen to know what a move to IFRS involves and many are thinking seriously about preparing themselves for what they see as an inevitable transition.
It doesn’t seem so long ago that we were hearing a different story from the US. Many predicted that US GAAP would be here for years to come, perhaps even becoming the global accounting framework. More recently we have witnessed the US FASB and the IASB working together to produce a revised version of IFRS 3, Business Combinations, and an amended version of IAS 27, Consolidated and Separate Financial Statements. The two boards are also pooling resources to develop an exposure draft on Financial Instruments with Characteristics of Debt and Equity and to develop a common Conceptual Framework. This shows that the IASB and FASB are moving in the same direction and that must surely have helped to turn the tide.
The US Securities and Exchange Commission has hinted that it expects to make an announcement on the roadmap for acceptance of IFRS before 21 September. That date is not set in stone and still could change. But I think the SEC’s commitment to publishing the roadmap shows recognition of a shift in thinking among the US financial reporting and investor communities in favour of IFRS, and recognition that US companies are keen to know when (rather than if) they will be permitted or required to use IFRS.
A key consideration for the SEC will be the timing of transition. This was the subject of debate at the roundtables held at the end of last year. Should there be a mandatory transition date? Should there be an optional transition period? Should there be a phased approach to conversion (as with Sarbanes-Oxley 404)? Email me and let me know what you think.
My US colleagues tell me that many clients have already started discussion on what a transition to IFRS would involve and are keen to learn from Europe’s experience some three years ago. They are also considering the different regulatory environment and the influence of Sarbanes-Oxley in particular.
If you are interested in following developments on the US transition to IFRS, you may want to take a look at this website www.pwc.com/usifrs You can navigate your way around a new set of interactive IFRS financial statements. If you do, let me know what you think, either by commenting here or by email.
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