US companies could adopt IFRS by 2015: SEC

US companies may be using international accounting standards by 2015, under a plan being considered by the US securities regulator.

The US Securities and Investments Commission (SEC) released a preliminary plan which would require US-listed companies to report under international accounting rules no earlier than 2015.

The SEC said the four-five year lead up followed concerns by respondents on a proposed adoption roadmap which first proposed in late 2008.

The plan is contingent upon both the US accounting standard setter, the Financial Accounting Standards Board (FASB), and the international standard setter, the International Accounting Standards Board (IASB) harmonising their accounting languages by 2011.

The SEC said it will hold off making a final decision until then.

“As a step toward achieving the goal of a single set of high-quality global accounting standards, the statement notes that the Commission continues to encourage the convergence of U.S. standards and the set of international accounting standards known as International Financial Reporting Standards (IFRS); in effect, narrowing the differences between the two sets of standards,” the SEC said in a statement.

In the meantime, it will investigate whether international standards are sufficiently developed, consistent with the U.S. reporting system and the independence of the IASB. It will also look into whether there is sufficient education regarding IFRS, and how it differs from US GAAP.

Other issues include whether US laws or regulations, outside of the securities laws, for example tax laws and regulatory reporting, would be affected by a change in accounting standards. Also the SEC would consider the impact on companies, both large and small, including changes to accounting systems, changes to contractual arrangements, corporate governance considerations and litigation contingencies.

The SEC also wants to know whether the people that prepare and audit financial statements are sufficiently prepared, through education and experience, to make the conversion to IFRS.

Today's statement will likely reassure recent national adopters of international standards, who signed up in the hope that the US would eventually take on the rules. However, with no firm guarantee, and with the SEC yet to formally decide on the statmeent itself, there may remains a cloud of uncertaintity about what the SEC may do come 2011.

Further reading: SEC considers reaffirming commitment to global standards