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FINANCIAL REPORTING

SEC Action on IFRS Could Come Early in 2010

 

DEC. 9, 2009

SEC Commissioner Elisse B. Walter on Wednesday said she expects the commission to “consider further action” on IFRS adoption early next year.

 

Walter’s comments at an AICPA conference followed remarks by SEC Chief Accountant James Kroeker on Monday in which he said more information about IFRS adoption would be forthcoming “in the short term.”

 

The SEC proposed its IFRS convergence road map in August 2008 under former Chairman Christopher Cox. Under the proposal, the SEC would decide in 2011 whether to proceed with rulemaking to require that U.S. issuers use IFRS beginning in 2014. Early adoption beginning with filings in 2010 would be allowed for certain issuers.

 

But during her Senate confirmation hearings in January, newly appointed Chairman Mary Schapiro expressed reservations about the road map, and the commission subsequently extended the public comment period. Since then, both Kroeker and Schapiro have said the commission would clarify its position on IFRS “this fall.” 

 

“As with any important policy question, we are proceeding deliberately and thoughtfully. We are working diligently to make sure we understand all of the advantages and disadvantages,” Walter said in her speech Wednesday. “At this stage in our review process, I expect we will likely consider further action sometime in early 2010.”

 

Walter also discussed the ongoing Congressional debate over financial regulation in the wake of the economic crisis, highlighting the importance of maintaining the independence of the standard-setting process for accounting standards.

 

“Oversight of the independent private-sector standard setter should not become entangled with other regulatory priorities, such as addressing systemic risk,” Walter said. “Instead, accounting standards should remain a means of producing neutral and objective measures of the financial performance of public companies. This is critical if we are to protect the integrity and credibility of accounting standards, which are the backbone of our financial reporting system.”

 

The full text of Walter’s speech is available here.

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