Critics say gradual adoption of international standards would confuse investors
The all but certain transition to international accounting standards is sure to be a marquee event for public and private companies. But it looks as if the Securities and Exchange Commission is leaning toward a soft open that would give U.S. companies the option of switching to the new standards before their use is required.
Although plans are not yet set in stone for the rule proposal expected later this summer, two SEC officials said last week that the agency is considering giving U.S. companies the option to switch to international financial reporting standards (IFRS) using a phased-in approach.
“The road map concerns whether U.S. companies should have the option to switch to IFRS,” said SEC chief accountant Conrad Hewitt, noting the SEC will also set goals for an eventual IFRS mandate. Such a phased-in approach would mimic other SEC regulations, such as a recent rule requiring interactive data in financial filings, that focus first on large companies and eventually expand the mandate to include all registrants.
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