Securities and Exchange Commission chief accountant Conrad Hewitt said SEC staff members planned to propose a date for mandating the use of International Financial Reporting Standards by public companies, but the date would not be confirmed for two years, giving accountants some extra leeway.
The confirmation would occur through a future commission that would examine whether key milestones had been met, such as whether U.S. companies are ready. Hewitt made the remarks at a joint meeting this week of the Financial Accounting Standards Board and the Financial Accounting Standards Advisory Council, according to a report by BNA.
SEC Chairman Christopher Cox seems to favor a phased approach. In a speech at Stanford Law School this week, he said, "The U.S. may well want to establish a date certain, but one that is sufficiently far off in order to permit what is likely to be an expensive mandate for U.S. issuers to be comfortably met. At the same time, transitioning to IFRS more gradually in the meantime would let the U.S. establish the knowledge base and systems we need to sustain it before a do-or-die switch is required for everyone. That could also reduce costs for the larger number of filers who wait until eventually a switch is required. One way to do this might be to give issuers in the near term the option of using IFRS as 'early adopters,' but only if doing so would enhance the comparability of their financial statements - for example, with others in their industry group."
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