SEC Solicits Views on Issues Related to Its Consideration of Incorporating IFRSs Into the U.S. Financial Reporting System

Published on: 16 Aug 2010

The SEC has released requests for comment on a number of topics related to its consideration of incorporating International Financial Reporting Standards (IFRSs) into the financial reporting system for U.S. issuers. The SEC invites comments from all interested parties no later than 60 days after publication of the requests for comment in the U.S. Federal Register.

The requests form part of the SEC’s work plan to consider specific areas and factors before deciding whether to incorporate IFRSs into the current financial reporting system for U.S. issuers (as laid out in the SEC’s February 24, 2010, statement in support of convergence and global accounting standards).

The requests for comment solicit views on the following topics:

Release 1 (SEC Release 33-9133) — Investors’ preparedness and education needs, including:

  • U.S. investors' current knowledge of IFRSs and preparedness for the SEC’s incorporation of IFRSs into the U.S. financial reporting system.
  • How investors educate themselves about changes in accounting standards and the timeliness of such education.
  • Extent of, logistics for, and estimated time to make any necessary changes.

Release 2 (SEC Release 33-9134) — Impact on issuers’ compliance with contractual and corporate governance requirements and application of legal standards, including:

  • Contractual arrangements under U.S. GAAP (e.g., financial covenants, lease contracts, employee compensation, earnout provisions).
  • Issuers’ compliance with corporate governance requirements and stock exchange listing requirements.
  • The application of statutory distribution restrictions and other legal standards tied to amounts determined for financial reporting purposes.

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