US abolishes reconciliation requirement
1 min read
15 November 2007
Great news for those UK companies that have to reconcile their IFRS accounts to US GAAP.
The US Securities and Exchange Commission (SEC) has finally agreed to drop the costly requirement after receiving what it says was “extensive and informative” comment to its proposal on the matter.
The SEC says the move is for the good of American investors, allowing them to “better analyse and get more readily comparable financial information from the US-registered foreign companies in which they invest”.
The commission has also made quite a political point by only scrapping the reconciliation requirement for companies using the standards as approved by the International Accounting Standards Board.
This means a company will still have to reconcile to US GAAP if it’s using international standards that have been tweaked to suit local conditions, diluting their influence. The aim is of course to eventually have one global set of standards for every company in the world.
IASB chairman David Tweedie must be a very satisfied man. And so he should be – it’s about bloody time this happened!