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SEC urged to commit to IFRS

Two former chairmen of influential accounting standards boards urged the SEC t

The International Financial Reporting Standards are getting some strong support from two very influential sources.

At a recent panel discussion hosted by the American Institute of CPAs, former Financial Accounting Standards Board chairman Robert Herz and former International Accounting Standards Board chairman Sir David Tweedie called on the Securities and Exchange Commission to affirm its support for the new IFRS rules before other countries begin to balk at the changes, according to AccountingToday.com.

With the SEC constantly delaying its decision to back the standards, major economic powerhouses like China, Japan and India have begun to signal their own reticence, Tweedie told the panel. At the same time, a lack of U.S. involvement could result in the IFRS implementation process becoming disorganized and chaotic.

"The U.S. has the key to international standards in its hand," said Tweedie. "The SEC needs to give an indication. The world is waiting and waiting and waiting."

Herz echoed his colleague's claims, reports the news source, noting that U.S. involvement will be important to IFRS implementation. In the end, Herz said the SEC will likely endorse the measures.

Also speaking at the panel discussion, IFRS Advisory Committee chairman and former chairman of the Canadian Accounting Standards Board Paul Cherry noted his country's approach to implementing IFRS and the ways businesses have made it work. Initial attempts to "harmonize" IFRS standards with U.S. standards led to frustration within Canadian industries, so a five-year conversion to IFRS was planned, AccountingToday reported.

One piece of advice he had regarding IFRS conversion was not to wait until the standards are issues. Getting prepared sooner than later has helped ease transitions in Canada.

One Canadian company, payroll services provider Mint Technology Corporation, recently announced it had finished the conversion from Canadian Generally Accepted Accounting Practices to the new IFRS standards, and discussed some of the changes the company had to make. The company filed its first financial statement and MD&A for the fourth quarter of 2011 using the standard.

"The most significant change to IFRS reporting has required the company to evaluate the impact of the changing value of the unexpired warrants on issue," according to Mint. "One of the main drivers for the necessity of accounting in this manner is the fact that the functional currency of the company is different from its reporting currency. The functional currency for the company and its subsidiaries is the currency of the primary economic environment in which the entity operates - in each case, the United Arab Emirates Dirham. These consolidated financial statements are presented in Canadian dollars, which is the company's reporting currency."

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