Wednesday, February 4, 2009

The SEC IFRS Roadmap

I learned yesterday from the FEI Financial Reporting blog that the SEC has extended the comment date on the proposed IFRS Roadmap to IFRS adoption in the USA. You may recall that comments were previously due on February 19, 2009. The FEI and others asked the SEC for an extension since most companies are involved in year end activities in the most extraordinary period in recent memory. It's tough to stay focused.

The new deadline is April 20, 2009, a sixty day extension.

This is only an extension of the comment period on a very weighty document. There are wide ranging implications that need more study. Even the most ardent IFRS supporter should understand this. Mary Schapiro certainly has a lot on her plate and it must be difficult to decide what to fix next. President Obama must wake up every day with this dilemma. Let's hope he is actually getting his sleep.

There have been several comments submitted already on the Roadmap and these comments are posted on the SEC website. It's an interesting and transparent process.

Please be assured even though there are numerous rumours flying around, there has been no decision in the US on whether IFRS is to be adopted or if so when. That's the subject of the current debate on the Roadmap.

If you are following along in this blog you will know that we are on track in Canada for converting to IFRS effective for fiscal years beginning on or after January 1, 2011. There are many issues involved in implementing this timetable and I will continue to report on them. I will be moving to a new site very shortly to post under my IFRS Exorcist name but I will give you a lot of notice and allow a transition period.

Questions continue to be asked (by companies that have barely started the conversion - yes believe it or not) will there be a deferral of the implementation date of IFRS in Canada? The Accounting Standards Board in Canada continues to confirm that there are no plans to defer the implementation date. Companies are challenged to find funding for the resources to carry out the project.

Last year, about exactly a year ago in fact, the Canadian Financial Executives Research Foundation (CFERF) conducted a study on IFRS preparedness. The results of the study were published last April. (It's a free download). The study was sponsored by Ernst and Young in Canada. CFERF will be conducting a new study of IFRS preparedness very shortly. It will be very interesting to see if the level of preparedness is significantly higher over last year.

I should point out that I am a Trustee (Board Member) of CFERF (the opinions expressed herein are mine alone)

Implementation in Canada is also complicated by the high level of activity at the IASB as the Board and the FASB seek to converge standards in anticipation of adoption of IFRSs in the USA. Companies have to build in potential changes in the Standards into their conversion plans. This of course adds to the work depending on a company's particular situation.

There is a lot of anecdotal evidence of a high degree of lack of IFRS preparedness in Canada especially in the large number of small to medium size "publicly accountable" enterprises. These organizations do not have the staff who are devoted to financial reporting matters exclusively as many of the larger public companies have.

I am looking forward to the empirical data.

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