SEC Proposes Roadmap toward Global Accounting Standards

The U.S. Securities and Exchange Commission (SEC) voted on Wednesday to publish for public comment a proposed roadmap that could lead to the use of International Financial Reporting Standards (IFRS) by U.S. issuers beginning in 2014.

Currently, U.S. issuers use U.S. Generally Accepted Accounting Principles (U.S. GAAP). The SEC would make a decision in 2011 on whether adoption of IFRS is in the public interest and would benefit investors.

The proposed multi-year plan sets out several milestones that, if achieved, could lead to the use of IFRS by U.S. issuers in their filings with the SEC, the securities regulator said in a statement.

The increasing integration of the world's capital markets, which has resulted in two-thirds of U.S. investors owning securities issued by foreign companies that report their financial information using IFRS, has made the establishment of a single set of high quality accounting standards a matter of growing importance.

A common accounting language around the world could give investors greater comparability and greater confidence in the transparency of financial reporting worldwide.

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.

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, he added.

More than 100 countries around the world, including all of Europe, currently require or permit IFRS reporting. Approximately 85 of those countries require IFRS reporting for all domestic, listed companies.

Source: CRIEnglish