As the debate over adoption of International Financial Reporting Standards heats up in the U.S., KPMG has released a survey indicating support for IFRS among investors, analysts and corporate executives who prepare financial statements.
The KPMG survey found that 65 percent of the investment executives and analysts surveyed expect IFRS to make the U.S. capital markets more attractive to foreign investors. Fifty-seven percent of the investors and analysts surveyed believe the timeline proposal announced by the SEC in November to be “about right,” while 18 percent said it wasn’t aggressive enough. Meanwhile, 55 percent of corporate executives agreed with the timeline, while 8 percent said it was “too long.”
However, recently appointed Securities and Exchange Commission Chair Mary Schapiro told a congressional committee during her confirmation hearing that she may delay the proposed roadmap issued by her predecessor, Christopher Cox, for moving the U.S. from generally accepted accounting principles to IFRS (see New SEC Chair May Delay Roadmap). “I will take a deep breath and look at this entire area carefully,” she said. She is concerned about the international standards being looser than U.S. standards, as well as the governance of the International Accounting Standards Board.
Under the SEC’s proposed timeline, select companies could begin using IFRS this year, and large accelerated filers could be required to use IFRS for financial reporting periods ending on or after Dec. 15, 2014.
Despite most respondents to the KPMG survey agreeing with the proposed timeline, just 16 percent of the investors and analysts, and 20 percent of the financial executives, said they currently have a solid understanding of IFRS. In addition, 77 percent of analysts and investors said they want companies to begin explaining their IFRS conversion plans at least one-to-three years prior to the change.
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