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As we wrap-up 2010, and look forward into next year, I think 2011 is shaping up to be a very important year for accounting standards world wide.  First, the initial wave of FASB / IASB convergence projects should be completed and compliance timelines announced.  The expectation is for the new rules to become effective no earlier than 2013.  These changes will impact customers reporting under both US GAAP and IFRS.  Second, the SEC in the US is expected to provide an update on the IFRS Roadmap and adoption timeline.  Many US customers are waiting for the SEC’s announcement before making final preparations for IFRS.

On November 29, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), published their 3rd progress report on converging US GAAP and IFRS.  Both FASB and IASB reaffirmed that the target completion date for the priority projects remains June 2011 or earlier.  In general, the key discrepancies or gaps are being closed.  However, companies should realize that small differences will still exist.  So, a successful convergence will not mean that the FASB and IASB standards become identical, but that they are closer than before with major differences resolved.  Furthermore, this implies that a second transition step to IFRS may still be required for US GAAP filers if the SEC mandates IFRS adoption for public companies, though this transition is expected to be easier than if the FASB / IASB convergence projects had not been successfully completed.  For a summary of the FASB/IASB’s update, please see the Journal Of Accountancy.

On October 29, the SEC provided an update on their IFRS work plan.  Though there were no major conclusions or announcements, it is clear that the SEC is diligently working on IFRS and is currently focusing on six major areas.  In their update, they also raised logical concerns about the processes and organizations involved in setting IFRS standards.  Though no exact dates are given, the SEC IFRS work plan updates will be made periodically, so expect another next Spring or Summer. For a summary of the SEC’s update please see the Journal Of Accountancy.

With so many important accounting updates expected in 2011, I think history will show that it was an important tipping point for accounting standards world wide.  As you consider your New Year’s resolutions at your workplace, don’t forget to add one for accounting changes.  Knowledge and advanced planning will be the best way to ensure success in 2011 as the accounting changes unfold.  If you want some ideas for specific recommendations or action plans, please view the Fall Webinar Series and the IFRS Webinars and Recordings, both contain lots of excellent content from SAP and our partners.

“To be or Not to be?” is a question which modern day readers may still find perplexing.  But, “To Upgrade or Not to Upgrade?” is answered in this first IFRS webinar of the Fall Series.  In this webinar Lois Dick and I provide an update on IFRS and strategies to assess and develop your financial systems roadmap.  It highlights the importance of assessing the age and complexity of your systems, and the future direction of your business; key drivers which might tip the scale in favor of an upgrade as part of your IFRS transition plan.  This webinar show cases the array of SAP tools and best practices you can implement to help you achieve your SAP ERP 6.0 upgrade and be ready for IFRS compliance.
SAP Insider magazine recently published a Special Report on IFRS titled "The IFRS Transition".  It contains a very interstesting cover story called "An IFRS Fable: The Company That Waited Too Long" by SAP's top product executives Richard Campione and Sanjay Poonen. It also contains other articles of interest related to IFRS transitions by SAP Consulting, Redwood Software, Ernst & Young, LLP, and ecenta Asia Pacific Pte Ltd.  I think you will find the information in the special edition very useful especially when planning an IFRS transition. 

At the AICPA National Conference on Current SEC and PCAOB Developments being held in Washington December 7-9th, yesterday IFRS was discussed. We tracked the conference by following the tweets by the AICPA chair Robert Harris. Although nothing was announced officially, all the information about IFRS was positive.  See below for the tweets from the AICPA Chair at the meeting this morning

  • SEC Chief Accountant Kroeker on #IFRS: I expect you'll hear more from us on this topic in the near term. #aicpasec
  • AICPA Chair Harris: We intend to make significant headway on private company reporting in my term. #aicpasec
  • AICPA Chair Harris: #IFRS is pushing private company reporting to forefront. #aicpasec
  • AICPA Chair Harris: CPA Exam to include #IFRS in 2011. #aicpasec
  • AICPA Chair Robert Harris: 95% of accounting programs now include #IFRS in curriculum. #aicpasec
  • AICPA Chair Robert Harris: More consensus than disagreement on goal for single global accounting standard. #aicpasec
  • AICPA Chair Robert Harris: Thinking globally is no longer a luxury. It is a necessity. #aicpasec

To sum up, it looks like IFRS will be part of the CPA exam in 2011, that IFRS will be important for private companies, and that there is more "consensus than disagreement on goal for single global accounting standard".

UPDATE: For more information see comments by SEC Commissioner Elisse Walter on an expected IFRS update in early 2010:

and an interesting summary from the Journal of Accountancy:

IFRS is Coming: Are you Ready?

This is a question that many financial professionals in the US are being asked by their senior management as the pending changes required by IFRS adoption are becoming more widely known.  As a result, general interest in IFRS is increasing rapidly.  To help our customers answer this question and others, SAP is sponsoring a four-part IFRS webinar series highlighting recommendations on using SAP solutions, tools, and strategies to enable the transition to IFRS.  The series will also have presentations from the SAP corporate financial team detailing lessons learned from SAP's own transition to IFRS. 

By attending the webinar series, you will have a much clearer picture of what the IFRS project means to your organization; what tools, solutions, and services are available from SAP to help with the transition; and some key lessons learned to take home based on SAP's own IFRS project experience. 

In the first webinar on August 13, 2009 at 10 am PT/1 pm ET, James Fisher and I will present the "The SAP Roadmap for IFRS Compliance" covering SAP’s product roadmap and how SAP solutions provide the functionality required for businesses to implement IFRS.  It is important to note that SAP solutions are already IFRS capable with 1,000's of customers currently reporting their financial results using IFRS.  The SAP Roadmap for IFRS Compliance" will present an IFRS implementation timeline and recommendations for SAP solutions that were developed based on real feedback from customers and partners as well as our own SAP corporate Finance group which reports under both IFRS and US GAAP.  To find out more and register for this and the other webinars in the series please go to the registration page.