The SEC . . . must consider the varying needs and concerns of issuers (e.g., larger, multinational issuers vs. smaller, domestic-oriented issuers), who would be responsible for transitioning to IFRSs. We thus encourage the Commission to consider a multifaceted solution that would allow issuers to address individual transition concerns efficiently and cost-effectively. To that end, we believe that using an endorsement approach . . . to incorporate IFRSs into the U.S. financial reporting system, in conjunction with giving issuers an option to adopt IFRSs voluntarily during a transition period, strikes the right balance in addressing the various concerns raised by preparers and others. We agree that an endorsement approach would offer the benefits of (1) a more formal mechanism to address U.S.-specific issues and facilitate the SEC's mandate to protect U.S. investors and (2) the retention of U.S. GAAP as the statutory basis for financial reporting, thus avoiding the need for, and complexities with, changing the references from U.S. GAAP to IFRSs in U.S. laws, regulations, and contracts. . . .
In implementing an endorsement approach, the FASB should publicly seek stakeholders' input ("due process") when incorporating existing or new IFRSs into U.S. GAAP. We further believe that the goal of the due process should be to incorporate IFRSs, as issued by the IASB, without modification. . . .
[W]e believe that it would be appropriate for the FASB to override an IFRS principle before incorporating it into U.S. GAAP (both existing IFRSs and future IFRSs subject to endorsement) only if it determines that such an override is necessary in the public interest, to protect U.S. investors or there are legal or other operational barriers to incorporating the IFRS principle as issued by the IASB. . . . [W]e would expect the need to override a principle in IFRS to rarely arise. . . .
[W]e would encourage the SEC to remain committed to making a decision in 2011 (or as soon as practicable) regarding the approach of incorporating IFRSs into U.S. GAAP, despite the fact the FASB and IASB will not be able to complete the MoU projects by then." "We believe that preparers, investors, auditing firms, and others need certainty about whether, when, and how IFRSs will be incorporated into U.S. GAAP before they expend time and effort preparing the transition to IFRSs or an IFRS-based U.S. GAAP. . . .
We recommend that U.S. public entities should be permitted to early adopt IFRSs as issued by the IASB. . . .
We believe that a transition period of five to seven years is reasonable to meet the needs of issuers.