2010-11-09 SEC Staff Publishes Progress Report on Work Plan for Global Accounting Standards

On October 29, 2010, the Securities and Exchange Commission's Office of the Chief Accountant and Division of Corporation Finance published their first progress report on the Work Plan related to global accounting standards.

The Securities and Exchange Commission (the "Commission") directed agency staff earlier this year (as noted in their press release number 2010-27) to execute the Work Plan to provide the information needed to evaluate the implications of incorporating International Financial Reporting Standards (IFRS) into the financial reporting system for US issuers. The Commission indicated that following successful completion of the Work Plan and the convergence projects of the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), it will be in a position in 2011 to determine whether to incorporate IFRS into the US financial reporting system.

"The staff has invested significant time and effort in executing the Work Plan, and we've made great progress to date," said SEC Chief Accountant Jim Kroeker. "This progress report emphasizes the importance of transparency in the staff's activities, and can help the public's understanding of the magnitude of this project and the staff's progress."

The Work Plan addresses six key areas:

• Sufficient development and application of IFRS for the US domestic reporting system.
• The independence of standard-setting for the benefit of investors.
• Investor understanding and education regarding IFRS.
• Examination of the US regulatory environment that would be affected by a change in accounting standards.
• The impact on issuers both large and small, including changes to accounting systems, changes to contractual arrangements, corporate governance considerations, and litigation contingencies.
• Human capital readiness.

The SEC staff expects to continue to report periodically on the status of the Work Plan in 2011.

For a copy of the SEC's Work Plan, refer to their recent press release number 2010-207.