SEC publishes proposal to drop GAAP reconciliation

News Article - 04 July 2007
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Foreign firms which use international financial reporting standards (IFRS) for financial statements should not have to file them again under US principles, it has been proposed.

The Securities and Exchange Commission (SEC) has published a proposal to drop the requirement that foreign companies using the International Accounting Standards Board's (IASB's) IFRS must also reconcile their statements with US generally accepted accounting principles (GAAP).

If they go ahead, the proposed rule changes would only apply to those firms that follow the English version of the IASB's IFRS and would allow them to file statements without also publishing a GAAP reconciliation.

John White, director of corporation finance for the SEC, said that the proposal "represents another significant action to tailor the regulatory environment for foreign companies in the US public capital markets".

"We look forward to public feedback on this initiative," he added.

Last month, the SEC established an advisory committee with the intention of making the US reporting system more "user-friendly".

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