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October 17, 2010

US IFRS adoption ‘at least’ five years away

It will take five years to move from US GAAP to IFRS, according to a US accounting institute.

The American Institute of Certified Public Accountants (AICPA) made its estimation to the Securities and Exchange Commission (SEC) as part of feedback regarding a time frame for investor understanding of IFRS and the impact adoption will have on issuers’ compliance and contractual agreements that require US GAAP and governance.

The estimated five year time frame is on the provision that the SEC will require two years of historical comparative financial statements. However, the SEC has yet to announce what the requirement will be.

In its letter to the SEC, AICPA said it supports the goal of a single set of comprehensive accounting standards and believes those issued by the International Accounting Standards Board are best suited.

Next year the SEC will vote when and if the CPA profession will be required to transition to IFRS for US public companies financial reports. The regulator has so far not ruled out allowing issuers to choose between IFRS or US GAAP and plans 2015 as the earliest date for the required use of IFRS by US public companies.

 

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