On March 3, 2010, the SEC unanimously approved a timeline for mandating use of IFRS (International Financial Reporting Standards) by U.S. public companies. For years, U.S. companies have followed Generally Accepted Accounting Principles (GAAP). However, in 2007, the SEC set forth to move toward IFRS in an effort to operate by a high-quality, global set of accounting standards.
Initial goals of the SEC ambitiously hoped to have IFRS in place by 2014, but the recently approved timeline looks to 2015 as the earliest possible date. The SEC intends to complete additional studies regarding IFRS. The SEC is committed to moving toward IFRS, but the additional year provides some reprieve in finalizing the details and requirements.
In addition, the SEC withdrew proposed rules that would have allowed early adoption of IFRS. There has also been speculation that there would be a choice between using IFRS or GAAP, and the SEC has not ruled this out as a possibility.
The SEC will focus on the plan for IFRS and will be providing frequent progress reports, with the first update expected in October 2010.