Who Says We’re WaitingPosted: July 23, 2012
The long awaited SEC staff report on IFRS was finally released on 7/13. Somehow releasing the report on Friday the 13th seemed appropriate. There are those that believe IFRS is like Jason ready to cut key appendages off of critical accounting rules. Then there are those who believe all of the blood curdling screams are really just a bunch of hype for a make believe issue. Of course all of this horror depends on buying into the theme that the SEC Commissioners decision on the use of IFRS (which has not come yet and is likely not to come for some time) is the point at which the U.S. will start using IFRS, but like the people living on Elm Street, those people need to wake up because IFRS is already here.
While the few thousand U.S. public companies cannot file IFRS financial statements to meet their SEC reporting requirements, with the addition of Canada to the IFRS hold, several hundred foreign issuers already do file IFRS financial statements with the SEC. In addition, thousands more subsidiaries of foreign companies operating in the U.S. use IFRS for their day to day accounting. That means your colleagues working for Siemens, BMW, Mercedes Benz, and T Mobile are already using IFRS as their accounting standards and the number of such companies grows every day.
The public side of the profession as well as academia has also adopted IFRS in mass. It’s not just the big 4 or even the top ten national firms that have significant IFRS practices; regional and local firms are finding thriving practice niches around IFRS accounting. Colleges and Universities are offering and requiring courses in IFRS as well as U.S. GAAP because they realize their graduates need to know IFRS; not five or ten year from now, but the day they graduate.
The reality is that if you are in B&I and following the typical job path of today by working for multiple companies over your career, you will probably end up working for a company that uses IFRS at some point. The use of IFRS in the CPA profession is not something the SEC will decide. It is something the market has already decided and at some point the politicians in Washington and rest of the world focused solely on the SEC will figure that out.