August 2, 2012
The “IF” in IFRS
Many things in life take on a “hurry up and wait” path, and the SEC’s evaluation of whether or not to incorporate International Financial Reporting Standards (“IFRS”) into U.S. accounting practices is no different. As I write this blog, we are approaching four years since the SEC first issued their proposed road map to IFRS (August 27, 2008) and the acronym IFRS became a buzz word in the stock compensation world.
What’s the Latest News?
On July 13th, the SEC issued a long-awaited staff report that basically summarized their considerations around whether or not the U.S. should adopt IFRS. The key word here is “considerations”. The bottom line of the SEC’s report can be articulated quite simply: the SEC’s report did not contain a recommendation on whether IFRS should be adopted, or a decision and time frame for potential adoption, but rather an analysis of all of the related pros and cons. Where does that leave us? We remain in uncertain territory as to if, when and how IFRS will be adopted (thus the title of this blog). We are still very much in “if” territory, though many accounting experts keeping watch on this issue seem to feel strongly that it’s still a matter of “how” and “when” and not “if”.
No News is….No News!
The IASB has vocalized their impatience surrounding the U.S.’s slow decision making process when it comes to adopting IFRS, so that pressure is undoubtedly mounting. Even so, the prospect of the U.S. adopting IFRS remains on the horizon, and is not something the SEC is likely to decide on before the end of 2012. The good news is that we can turn our attention to more pressing matters (such as what to do about all the tax rate changes that are scheduled to kick in January 1, 2013), and, at least from a stock compensation perspective, not have to worry about looming accounting changes having an impact on us anytime soon.
This is still on the radar, and we’ll keep any updates coming. If you do have spare time, our IFRS2 Portal contains information on many of the considerations on the topic.
-Jennifer