The adoption of International Financial Reporting Standards (IFRS) by US companies will change the role of financial professionals. On November 14, 2008, the SEC published its proposed roadmap for the adoption of IFRS in the US, thereby affirming the SEC’s focus on moving toward global accounting standards. In the roadmap, the SEC did not set a definitive adoption date, but rather established several milestones that, if achieved, could lead to mandatory use of IFRS by US issuers beginning in 2014. Early adoption is permitted for qualified businesses for the period ending December 15, 2009.

The following are the highlights of the roadmap:
SEC Roadmap

* 2009- Early adoption allowed for qualified businesses for periods ending December 15, 2009
* 2011-SEC will measure early adopter success and progress against predefined milestones.
* 2014- IFRS filing for large accelerated filers for fiscal years ending on or after December 15, 2014.
* 2015- IFRS filing for accelerated filers for fiscal years ending on or after December 15, 2015
* 2016- IFRS filing for non-accelerated filers for fiscal years ending on or after December 15, 2016.

Regardless of the date that US companies are required to adopt IFRS, in the near term we can see continued convergence between US GAAP and IFRS accounting standards, followed by an eventual conversion to IFRS.

An agreement between the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”), called a Memorandum of Understanding (“MoU”), commits to improving both US GAAP and IFRS in 11 major subject areas, such as revenue recognition, leasing, consolidation, financial instruments, debt and equity. The effects of these accounting changes go far beyond financial reporting.

We believe that adoption is inevitable and would also be in the best interests of investors and companies as they move towards a single set of robust global accounting standards that ensure greater transparency between nations.

Steps US companies should take to prepare for IFRS

-Understanding the change: CEOs and CFOs of companies must be aware of the impact of IFRS on the entity, as the change affects not only the financial statements, but also other regulatory, legal or operational obligations that may arise. based on financial information.

-Conduct an initial assessment: engage IFRS consultants to conduct a detailed and in-depth assessment of the process and current practices.

– Impact on foreign subsidiaries – Consider how the new adoption of standards will influence business across international borders. Long-term strategies, international taxation, financing and other processes may need to be reviewed.

-Corporate GRC (Governance, Reporting and Compliances)- Starting early is the key to avoiding big costs later.

-Robust planning: Companies must consider the short- and long-term effect of the conversion and prepare a schedule to integrate them effectively into existing processes.

-Impact of IFRS on American companies Better transparency.

-Initial evaluation of the differences in GAAP and IFRS accounting is necessary within a company

-Advanced accounting and financial systems required for IFRS accounting

-The transition will require a lot of work, such as maintaining double ledgers, better information and reporting systems, and higher costs.

Although the implementation of IFRS is focused on public companies, soon private companies will also adopt them if they have foreign subsidiaries, foreign operations or foreign investors, etc.