The IFRS Challenge

There’s no longer any doubt: International Financial Reporting Standards (IFRS) are coming down the pipeline. The business and accounting press are full of news about IFRS, and businesses are realizing they need to pay attention.

Over 100 countries now require or permit IFRS reporting, including Hong Kong, Malaysia, Australia, India, Pakistan, Turkey, Singapore, Russia, South Africa, and also the European Union and the Cooperation Council for the Arab States of the Gulf.

In the U.S., the Securities Exchange Commission (SEC) has proposed a tentative roadmap to IFRS that features a set of progressive milestones. As proposed, the roadmap would let about 110 companies use IFRS for their end-of-year SEC filings for fiscal years ending after December 15, 2009.

For the years 2012 and 2013, companies will need to run U.S. Generally Accepted Accounting Principles (GAAP) and IFRS reporting in parallel in preparation for 2014 when large accelerated filers must compile their financial statement under IFRS rules and report a comparative statement for the previous two years (2012 and 2013) using both IFRS and U.S. GAAP.