Summary: Speaking at a Global Accounting Alliance roundtable discussion hosted by the AICPA, Wayne Carnall, chief accountant of the SEC’s Division of Corporation Finance, said he could not predict when the SEC would finalize the IFRS roadmap. However, he did say he was disappointed with the number of responses to the proposals.
When asked recently to give a prediction for when the SEC would finalize the IFRS roadmap, Wayne Carnall, chief accountant of the SEC’s Division of Corporation Finance, quoted Danish physicist Niels Bohr’s famous line that “prediction is very difficult, especially about the future.”
Eight months have passed since the SEC issued Release No. 33-8982, Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers, which provides a timeline for U.S. companies to adopt IFRS in a phased-in approach from 2010 through 2017, provided several conditions are met each stage along the away.
Comments on the proposal were originally due by February 19, but many companies said the complexity of a switch as significant as adopting IFRS to replace U.S. GAAP and the numerous details in the proposal demanded far more time. In SEC Release No. 33-9005, Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers, the SEC extended the comment period until April 20.
Since then, agency officials have had little to say about when the proposal might be approved. Although former SEC Chairman Christopher Cox considered the IFRS roadmap a priority, Chairman Mary Schapiro made comments during her confirmation hearing that she would proceed with caution in regards to IFRS because it was not yet a mature enough body of accounting standards to sufficiently ensure the protection of U.S. investors.
“I can’t tell you what we are going to do,” Carnall said on July 17, 2009, during a Global Accounting Alliance roundtable discussion hosted by the AICPA. For now, the SEC is reviewing the 240 comment letters it received about the proposed IFRS roadmap. The total represents 1% of companies that would be impacted by the proposals. “I thought that was a surprisingly low number,” Carnall said, adding that FASB Staff Positions issued in November received many more responses. “We extended the deadline, so it’s a little disappointing.”
However, later in the discussion, Carnall agreed with panelists, including FASB Chairman Bob Herz, who said they had to postpone decisions on many financial reporting issues due to the financial crisis. After the discovery of Bernie Madoff’s $65 billion Ponzi scheme, the SEC has devoted more time to issues that it considered key to protecting investors. “There are always fires, but the fires now are burning quite strongly,” Carnall said. “Hopefully, they die down.”
Source: WG&L Accounting & Compliance Alert Checkpoint 7/20/09