In February 2010, when the SEC issued a statement on its commitment to the development of a single set of high-quality globally accepted accounting standards, it directed the SEC staff to execute a “Work Plan” addressing specific areas of concern related to the incorporation of IFRSs into the U.S. financial reporting system. The purpose of the Work Plan is to provide the SEC with the information it needs to make a well-informed decision in 2011 about whether, when, and how the U.S. financial reporting system should make the transition to a system incorporating IFRSs. In its February statement, the SEC indicated that it would provide frequent public progress reports beginning no later than October 2010 and continuing thereafter through completion of the Work Plan.

Today, in accordance with that commitment, the SEC’s staff issued its first public progress report on the staff’s efforts and observations to date under the Work Plan. For each of the six areas of concern identified in the Work Plan (see below), the progress report summarizes the objectives of the Work Plan as well as the SEC staff’s efforts in executing the Work Plan and its preliminary observations to date, as applicable.

As noted in the progress report, “many of the Staff’s efforts are currently in process and are not expected to be completed until 2011, particularly as they relate to consideration of the sufficient development and application of IFRS for the U.S. domestic reporting system and the independence of standard setting for the benefit of investors.” The SEC staff intends to continue to report periodically on the status of the Work Plan.

Areas of Concern Identified in the Work Plan

The six areas of concern identified in the Work Plan and the progress report are:

Watch for an upcoming Deloitte Heads Up newsletter, and register for the November 15, 2010, Dbriefs webcast on SEC hot topics, which will cover the details of the Commission’s progress report.