Having considered extensive and informative public comment on its June 2007 proposal, the Securities and Exchange Commission in mid-November 2007 approved rule amendments under which financial statements from foreign private issuers in the U.S. will be accepted without reconciliation to U.S. Generally Accepted Accounting Principles only if they are prepared using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The purpose of the requirement to use the IASB-approved version is to encourage the development of IFRS as a uniform global standard, not a divergent set of standards applied differently in every nation.

The SEC expects the move will help investors better analyze and get more readily comparable financial information from the U.S.-registered foreign companies in which they invest.

According to the SEC, the number of Americans who own foreign securities has risen significantly in recent years. Today, two-thirds of American investors own securities of foreign companies. That is a 30 percent increase in the past five years. The vast majority of U.S. investors own securities of companies that report their financial information using IFRS. IFRS is mandatory in Europe and in several other countries, and its use is mandated or permitted in over 100 nations around the world.

"Consistent application of international accounting standards will help the two-thirds of U.S. investors who own foreign securities to understand and draw better comparisons among investment options than they could with a multiplicity of national accounting standards," said SEC Chairman Christopher Cox.

The rule amendments will take effect 60 days after they are published in the Federal Register and apply to financial statements covering years ended after Nov. 15, 2007.

The SEC also convened two roundtables, on December 13 and December 17, to collect feedback from the public on the issue of giving U.S. domestic issuers the same option that foreign issuers have in our markets to use either IFRS or U.S. GAAP. Comments from these sessions are to be posted to the SEC’s IFRS Roadmap page.

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