Monday, February 22, 2010

SEC Refocuses on IFRS Roadmap

The SEC received over 200 comment letters on the IFRS Roadmap. The letters came from companies, Big 4 Accounting firms, investor groups, and others. James Kroeker, Chief Accountant at the SEC has stated that he is hopeful that the SEC will announce some kind of public follow up in early 2010.

Kroeker had hinted last year that the announcement would be made last fall, but the SEC made no announcement.

In an interview with WebCPA, Kroeker said that politics was no the issue. Rather the SEC’s “diligent and deliberate” efforts, ihave not allowed a quick response in combination with the SEC’s preoccupation with the U.S. financial crisis, plus “re-energizing the agency as a whole.”

Kroeker feels that there is a good relationship between the FASB and the IASB and that they each “hear the thinking of their counterparts.”

“I’m hopeful that it will be much more likely that they’ll come to a consensus on a common high-quality solution. That isn’t necessarily going to be the case on all issues, but I think it certainly increases the prospects.”

On the speed at which new standards are being completed, Kroeker takes comfort in the fact that the FASB and the IASB have completed a “detailed listing, project-by-project, of what they expect to work on, when they expect to work on it, and what they think the deliverables are. If you look at that, there is an awful lot of deliverables that they’re expecting over the next six to nine months. That’s where we’ll see the real results as to whether or not they are achieving the milestones they are setting out for themselves. The other thing that’s encouraging to me is they have also committed to keep that updated, so if there is, in fact, slippage against the milestones, they’re going to update folks as to where they think they are and why.”

Kroeker is cautiously optimistic that the two Boards will complete their planned milestone of agreeing on a common set of international standards by mid-2011.

Kroeker set a precautionary tone on the pace a twhich change can occur: “I’ve already started to hear in the system some commenters saying you may be able to get this done, but it is a lot of change for the system to absorb.

Kroeker contrasted potential approaches, speculating that the FASB and the IASB muct choose between a “implementation immediately, but do they then call for effectively a “big bang” to implement all of them at one point in time? Or do they say, ‘Hey, there’s actually some phase-in?”

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