SEC Pushes Back IFRS Roadmap - - CFO.com

SEC Pushes Back IFRS Roadmap - - CFO.com

SEC Pushes Back IFRS Roadmap
By extending the comment period, the SEC could impede large U.S. companies from getting a head start on adopting the global rules.

Sarah Johnson - CFO.com US
February 4, 2009

Excerpts:

The Securities and Exchange Commission has given businesses two more months to respond to its proposed timeline for moving all U.S. public companies to international financial reporting standards. The extension of its public-comment period could hinder the hopes of the few companies that had wanted to get the go-ahead to apply IFRS to their U.S. filings later this year.

Still, even those companies eager to eliminate their U.S. GAAP-based books asked the SEC in their comment letters to give finance executives — currently busy finishing up their quarterly filings — more time to think about the commission's 165-page proposal. "The transition from U.S. GAAP to IFRS is not an accounting standard adoption exercise but rather a global project, impacting every facet of a company's operations," warned Margaret Smyth, controller of United Technologies Corp. However, she has been publicly encouraging the regulator to give companies the option of using the global rules even before rule-makers finish melding their standards.


Going against Smyth's wishes are the many factors slowing last year's momentum toward IFRS eventually replacing U.S. GAAP as Corporate America's main accounting language. Since former SEC chairman Christopher Cox presented the timeline in late August, the commission has become enmeshed in responding to the financial crisis, the effect on its own reputation from the Bernard Madoff's alleged Ponzi scheme, and a change in leadership. "The change in administration and in political viewpoints is having an impact on the appetite for IFRS," says Brian Minnihan, assurance partner with the technology practice at BDO Seidman.

... According to James Barlow, corporate controller for health-care company Allergan, audit firms have estimated that a GAAP-to-IFRS switch will cost between 0.5 percent and 1 percent of a company's annual revenue in addition to two to three years of hard work. He figures his own company will spend at least four times the amount of money to implement IFRS as it spent on implementing the internal-control provision of the Sarbanes-Oxley Act — a prospect that surely won't sit well with the many CFOs still shaking their heads over the headaches caused by Section 404.


Read full article: http://www.cfo.com/article.cfm/13056185/c_2984368
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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.