Transitioning to IFRS: Planning Considerations

Jo Lynne Koehn, PhD, CPA, and Janice L. Klimek, PhD, CPA

On February 24, 2010, the SEC issued a statement in support of convergence and a single set of high-quality global accounting standards, suggesting that 2015 would be the earliest possible date for mandatory reporting by U.S. companies under International Financial Reporting Standards (IFRS) (www.sec.gov/rules/other/2010/33-9109.pdf). This recent statement by the SEC (which updated the commission's IFRS road map given on November 14, 2008) offered a work plan of continued study of IFRS and its implementation issues and a plan to take a vote in 2011 on whether to mandate conversion to IFRS. This work plan details six critical areas of study by the SEC: 1) development of IFRS for the U.S. domestic reporting system; 2) independence of standards setting; 3) investor understanding and education regarding IFRS; 4) examination of the U.S. regulatory environment potentially affected by a change in accounting standards; 5) the impact on issuers, such as accounting systems and contractual arrangements; and 6) human capital readiness.