Monday, February 06, 2012

IFRS Outlook Survey for the United States

Corporate financial reporting in the United States is in a period of change and uncertainty. In light of these changes, PricewaterhouseCoopers (PwC) published, in December 2011, a report called 2011 US IFRS outlook survey: Companies' thoughts on the best timing and methods for incorporating IFRS into the US financial reporting system. The report presents the views of finance executives and other stakeholders on approaches to incorporating International Financial Reporting Standards (IFRS) that would best serve the interests of investors, preparers and other users of financial statements.

The key findings are as follows: 1) Respondents had differing perspectives on the timetable for any SEC announcement as well as whether aspects of IFRS incorporation should be mandatory or voluntary. 2) Many companies have taken a “wait and see” attitude. Although a majority of executives still see the transition from US GAAP to IFRS as inevitable, most have not yet committed resources to the process. 3) Support for the US transition to IFRS remains strong, but has declined over the past year. This is attributed to uncertainty about the timing and specifics of the SEC’s plans. 4) The endorsement approach to transition, as outlined by the SEC staff in their May 2011 staff paper, is widely seen as a viable – though not necessarily the most preferred – means for the US to transition to IFRS. 5) There is still considerable debate and uncertainty in the cost-benefit analysis of moving to IFRS. Each company is different, so there is no easy way to generalize about the impacts of IFRS on US companies.