SEC May Schedule Accounting Shift

Companies should begin preparing now for major accounting changes spurred by U.S. Securities and Exchange Commission efforts to adopt international standards.

Lisa Filomia-Atkas, a partner with Ernst & Young L.L.P., New York, gave that advice during a discussion of a SEC International Financial Reporting Standards “roadmap” project.

The SEC officials involved with the project hope to announce guidelines for adopting the standards – and deadlines for complying with the guidelines – later this summer.

Many expect the SEC to set the compliance deadline around 2013; and to permit public U.S. companies to implement the IFRS guidelines as early as 2011, Filomia-Atkas said here during a presentation.

Because companies may want or need 2 years of balance sheets for comparison purposes, they may need to begin submitting IFRS-compliant financials as early as 2010, Filomia-Atkas warned.

But, when foreign filers were first required to file with the SEC, the SEC required only 1 year of comparative data, so there might be some flexibility, Filomia-Atkas said.

It is not clear exactly how the SEC guidelines will affect non-public companies.

But, for the companies that are affected, the cost of preparing accounting systems could be greater than the cost companies recently experienced when they began complying with the Sarbanes-Oxley Act, Filomia-Atkas said.

Affected companies may have to change accounting systems, disclosure policies, accounting policies, and tax, regulatory and financing strategies, Filomia-Atkas said.