SEC 'encourages IFRS development'

News Article - 24 May 2012
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Foreign-based companies with a listing in America are to be allowed to issue financial statements using International Financial Reporting Standards (IFRS).

Following a unanimous vote by the US Securities and Exchange Commission (SEC), these companies will no longer have to reconcile their statements to US Generally Accepted Accounting Principles (GAAP) as long as they follow International Accounting Standards Board approved version.

The commission said that companies must follow the International Accounting Standards Board approved version of IFRS and that the new rules will "encourage" a standardised global form of reporting.

"Consistent application of international accounting standards will help the two-thirds of US investors who own foreign securities to understand and draw better comparisons among investment options than they could with a multiplicity of national accounting standards," said SEC chairman Christopher Cox.

Two roundtables are to take place during December, collecting public feedback on the issue.

Former SEC chief accountant Lynn Turner recently told Accountancy Age that US companies did not have enough knowledge of IFRS for it to be successful.

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