Currently, U.S. issuers use U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Commission would make a decision in 2011 on whether adoption of IFRS is in the public interest and would benefit investors.
According to a Wall Street Journal report, the plan calls for early, voluntary use of international accounting standards by large U.S. multinational firms in 2010, followed by an SEC vote in 2011 on whether to require all U.S. companies to make the switch. The switch to international accounting could be staggered, starting with large U.S. companies in 2014, followed by mid-sized companies in 2015, and small companies in 2016.
The SEC proposal sets seven “milestones” to be met, including obtaining an independent, stable source of funding for the London-based International Accounting Standards Board (IASB), the WSJ said. The Roadmap also calls for continued collaboration between the IASB and the U.S. Financial Accounting Standards Board (FASB) to narrow differences between U.S. and international accounting rules (See IASB Begins Project to Align Standards with US FASB ) and changes to the ways in which U.S. accountants are educated and trained.
“An international language of disclosure and transparency is a goal worth pursuing on behalf of investors who seek comparable financial information to make well-informed investment decisions,” said SEC Chairman Christopher Cox, in the SEC announcement. “The increasing worldwide acceptance of financial reporting using IFRS, and U.S. investors’ increasing ownership of securities issued by foreign companies that report financial information using IFRS, have led the Commission to propose this cautious and careful plan.”
Public comment on the SEC’s proposal should be received by the Commission no later than 60 days after its publication in the Federal Register. The SEC said the full text of its proposal will be posted to www.sec.gov as soon as possible.