|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
Could You Switch to IFRS in 3 Years?, Since it worked for Europe, a 2011 deadline for changing over U.S. companies' financials from GAAP could be reasonable.
Sarah Johnson
cfo.com. December 17, 2007
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EXCERPT: Following a 2002 mandate from the European Commission, European companies took three years to change over their financial reporting systems from their home-country GAAP to International Financial Reporting Standards. By most public accounts, the change generally went smoothly for the companies that made the switch and the European securities market as a whole. "We could have had 7,000 [companies] produce complete garbage but we didn't," said Richard Thorpe, head of accounting, auditing, and capital and groups policy at the U.K. Financial Services Authority. So it would stand to reason that U.S. companies would likewise need only three years to transition to IFRS, right? That's the thinking at least of the large multinationals domiciled in the United States that are hoping the Securities and Exchange Commission offers U.S. registrants the choice between filing their financials using IFRS rather than U.S. generally accepted accounting principles. Such a move would bring efficiency and cost savings to a company like Procter & Gamble, whose foreign subsidiaries are already using IFRS. According to Mick Homan, comptroller of corporate accounting for P&G, the company just recently began thinking about an organization-wide conversion to IFRS. He told an SEC roundtable on Monday that such a project would take a minimum of two to three years and cost millions of dollars initially. Homan, along with some of the other roundtable participants — who included representatives from accounting firms, a credit rating agency, and investment banks — suggested U.S. companies could benefit from their European counterparts' experience of transitioning to IFRS. The topic was raised during two SEC roundtables Monday designed to examine the effects and implications of letting U.S. companies choose between GAAP and IFRS, an idea the SEC floated earlier this year in a concept release. The commission is currently reviewing more than 85 comment letters that could lead to a formal proposal. |
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