US backs IFRS

The total cost of converting eligible companies to using international accounting standards will amount to around $3.5bn, according to the US financial watchdog.

Individuals companies could pay as much as $32m for conversion though the Securities and Exchange Commission estimates that only 110 companies will be able to convert.

The SEC revealed the estimated costs in its roadmap to IFRS conversion unveiled at the end of last week. The SEC is working towards a decision in 2011 for implementation 2014.

Publication of the roadmap had been expected at the end of the week of the presidential election but emerged under the cover of the G20 at the weekend.

Politically the roadmap is crucial because it essentially endorses the work of the international accounting standards setter, a setback for those who have heavily criticised the IASB for its adherence to fair value accounting

The SEC statement said in its statement: ‘We believe that IFRS has the potential to best provide the common platform on which companies and investors can compare financial information.’

On costs the statement said: ‘For the companies we estimate to be eligible…er estimate the costs for issuers of transitioning to IFRS to sum approximately $32m per company and relate to the first three years of filings on Form 10-K under IFRS.’

In an October 2005 interview with Accountancy Age, Barclay’s then FD Naguib Kheraj said conversion has already cost £50m.