SEC Commissioner comments on GAAP reconciliation

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18 Jun 2005

In a (PDF 69k) earlier this week in Washington, US SEC Commissioner Cynthia A.

Glassman spoke about elimination of the IFRS-US GAAP reconciliation requirement:

We are but one player in the global economy, and we do not operate in a vacuum. As many of you may be aware, beginning January 1, 2005, all listed European Union companies must prepare their consolidated financial statements in accordance with International Financial Reporting Standards ('IFRS'). As a result of this change, there has been increased focus on the desired elimination of our current reconciliation requirement and on the ultimate convergence of IFRS and U.S. GAAP. Since October 2002, the Financial Accounting Standards Board and the International Accounting Standards Board have been jointly pursuing a convergence project, and we have been very supportive of this effort. Don Nicolaisen, our Chief Accountant, has proposed a (PDF 228k) to convergence that lays out the staff's thinking about conditions and actions that would need to take place prior to ending our reconciliation requirement. Our staff has already begun this analysis, and the Commission is intent on considering the eventual elimination of the reconciliation requirement and the ultimate convergence of IFRS and U.S. GAAP. The consistent application and interpretation of the standards and the pace towards convergence will depend on companies and accounting firms as well as standard-setters and regulators.

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