On November 14th, 2008, the SEC finally released its much-awaited proposed IFRS roadmap, a document that was meant to serve as the holy grail of international accounting standards adoption. Now that nearly a week has passed and we've all had a moment to collect ourselves, much of the industry is left wondering "What now?"

Key milestones of the document, as summarized by the Journal of Accountancy, are as follows:

  1. Improvements in accounting standards
  2. The accountability and funding of the International Accounting Standards Committee Foundation
  3. Improvement in the ability to use interactive data for IFRS reporting
  4. Education and training in the U.S. relating to IFRS
  5. Limited early use of IFRS, beginning with filings in 2010, where this would enhance comparability for U.S. investors. Eligibility would be based on both the prevalence of the use of IFRS and the significance of the issuer in a given industry. The SEC estimates that a minimum of 110 companies could be eligible.
  6. The anticipated timing of future rulemaking by the Commission
  7. Implementation of the mandatory use of IFRS, including considerations relating to whether any mandatory use of IFRS should be staged or sequenced among groups of companies based on their market capitalization.

After weeks of waiting, working the accounting industry into an anxious lather, and a delay in the document's release due to this tiny little financial crisis we're dealing with, the preliminary roadmap has thus far been met with an overwhelming amount of doubt and frustration.
Former FASB member Ed Trott insists that now is not the time for such a drastic change in the industry (you can catch the video of him sharing his views here) while the SEC seems to stand by its decision.

If all goes according to plan, all U.S.-based businesses will be submitting IFRS-based financial statements after December 16, 2016.

While the SEC trumpeted the virtues of early adoption, they also begrudgingly admitted early adopters are likely to shoulder the burden of a $32 million cost per company to do so; companies considered to be in the Top 20 of their particular niche will be allowed to begin using the international standards after December 15, 2009.

Resistance to IFRS was felt long before the SEC announced its landmark decision. A Grant Thornton survey of CFOs released in October of 2007 found that more than three-fourths had no experience preparing IFRS-based financial statements, while more than half of those surveyed believed that U.S. firms should not be allowed to use IFRS statements in lieu of GAAP.

While the IFRS vs. GAAP war wages on, one thing is clear: the SEC cannot go back on its decision now that the proverbial cat has been let out of the bag. Especially in the wake of the recent G-20 Conference in Washington, DC, where the sentiment was unmistakably unanimous: Global convergence must happen and must happen soon. FASB and IASB board members were responsive but not enthusiastically so. Understandably, both the FASB and IASB insisted that they were already working towards resolving our current economic stresses and worried that additional pressure from outside may serve only to hinder as opposed to help the situation.

The resilient accounting industry, of course, has reacted to the buzz with a slew of IFRS webcasts, articles, breakdowns, and editorials.

The proposal remains open for comment 90 days from release.

Some great IFRS resources:
PwC's IFRS page
Deloitte's IFRS e-learning Center
KPMG's IFRS Institute
BDO's IFRS Resource Center

Have some IFRS resources to add? Comments on the transition? Let us know!