On June 20th, the U.S. Securities and Exchange Commission (the “SEC”) approved a proposal that, if ratified, could allow foreign companies doing business in the United States to choose between filing data using international financial reporting standards (“IFRS”) or the U.S. generally accepted accounting procedures (“GAAP”). This change would bring the U.S. closer to other major financial centers that currently welcome IFRS. In addition, allowing foreign companies to use IFRS will encourage them to sell shares in the U.S. because the cost of doing business in the U.S. is reduced. The reduction in cost results from the savings that the foreign companies would have because they would no longer have to keep two separate sets of accounting books and retain experts in both local and U.S. accounting.
The SEC will seek public comment on the proposal before taking a final vote on whether to ratify the proposal.
