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Securities and Exchange Commission 17 CFR Parts 210, 229, 230, Et Al

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Securities and Exchange Commission 17 CFR Parts 210, 229, 230, Et Al Friday, November 21, 2008 Part IV Securities and Exchange Commission 17 CFR Parts 210, 229, 230, et al. Roadmap for the Potential Use of Financial Statements Prepared in Accordance With International Financial Reporting Standards by U.S. Issuers; Proposed Rule VerDate Aug<31>2005 15:31 Nov 20, 2008 Jkt 217001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\21NOP2.SGM 21NOP2 dwashington3 on PRODPC61 with PROPOSALS2 70816 Federal Register / Vol. 73, No. 226 / Friday, November 21, 2008 / Proposed Rules SECURITIES AND EXCHANGE Paper Comments add Article 13. We are proposing the COMMISSION • Send paper comments in triplicate new Article 13 to apply to U.S. issuers to Florence E. Harmon, Acting and, as a conforming change, to foreign 16 17 CFR Parts 210, 229, 230, 240, 244 Secretary, Securities and Exchange private issuers that file IFRS financial and 249 Commission, 100 F Street, NE., statements.17 In Regulation S–K, we 18 19 [Release Nos. 33–8982; 34–58960; File No. Washington, DC 20549–1090. propose to amend Items 10, 101, S7–27–08] 301,20 504,21 1100,22 1112,23 1114 24 All submissions should refer to File 25 Number S7–27–08. The file number and 1115. In Regulation C, we propose RIN 3235–AJ93 26 should be included on the subject line to amend Rule 405. In Regulation G, 27 Roadmap for the Potential Use of if e-mail is used. To help us process and we propose to amend Item 101. Financial Statements Prepared in review your comments more efficiently, Table of Contents Accordance With International please use only one method. The Commission will post all comments on I. Overview Financial Reporting Standards by U.S. II. The Role of IFRS in the U.S. Capital Issuers the Commission’s Internet Web site Markets (http://www.sec.gov/rules/proposed/ A. The Promise of Global Accounting AGENCY: Securities and Exchange shtml). Comments also are available for Standards Commission. public inspection and copying in the 1. The Global Nature of Today’s Capital ACTION: Proposed rule. Commission’s Public Reference Room, Markets 100 F Street, NE., Washington, DC 2. Potential for IFRS as the Global SUMMARY: The Securities and Exchange 20549, on official business days Accounting Standard Commission (‘‘Commission’’) is between the hours of 10 a.m. and 3 p.m. B. Past Policy Considerations Regarding proposing a Roadmap for the potential All comments received will be posted IFRS use of financial statements prepared in without change; we do not edit personal III. A Proposed Roadmap to IFRS Reporting accordance with International Financial by U.S. Issuers identifying information from A. Milestones To Be Achieved Leading to Reporting Standards (‘‘IFRS’’) as issued submissions. You should submit only by the International Accounting the Use of IFRS by U.S. Issuers information that you wish to make 1. Improvements in Accounting Standards Standards Board by U.S. issuers for available publicly. 2. Accountability and Funding of the IASC purposes of their filings with the FOR FURTHER INFORMATION CONTACT: Foundation Commission. This Roadmap sets forth Craig Olinger, Deputy Chief Accountant, 3. Improvement in the Ability To Use several milestones that, if achieved, Division of Corporation Finance, at Interactive Data for IFRS Reporting could lead to the required use of IFRS (202) 551–3400 or Michael D. Coco, 4. Education and Training 5. Limited Early Use of IFRS Where This by U.S. issuers in 2014 if the Special Counsel, Office of International Commission believes it to be in the Would Enhance Comparability for U.S. Corporate Finance, Division of Investors public interest and for the protection of Corporation Finance, at (202) 551–3450, investors. This Roadmap also includes 6. Anticipated Timing of Future or Liza McAndrew Moberg, Professional Rulemaking by the Commission discussion of various areas of Accounting Fellow, Office of the Chief 7. Implementation of the Mandatory Use of consideration for market participants Accountant, at (202) 551–5300, U.S. IFRS related to the eventual use of IFRS in Securities and Exchange Commission, B. Other Areas of Consideration the United States. As part of the 100 F Street, NE., Washington, DC 1. The Roles of Financial Information Roadmap, the Commission is proposing 20549–3628. 2. Accounting Systems, Controls and Procedures amendments to various regulations, SUPPLEMENTARY INFORMATION: The rules and forms that would permit early 3. Auditing Commission is publishing for comment 4. Considerations of IFRS and the IASB’s use of IFRS by a limited number of U.S. a proposed Roadmap and proposed issuers where this would enhance the Standard Setting Process amendments to Regulations S–X,1 S–K 2 a. State of IFRS comparability of financial information and C 3 under the Securities Act of 1933 to investors. Only an issuer whose (the ‘‘Securities Act’’),4 and Rule 12b– 16 A ‘‘foreign private issuer,’’ as defined in Rule industry uses IFRS as the basis of 2,5 Schedule 13E–3,6 Schedule TO,7 3b-4(c) [17 CFR 240.3b-4(c)], means any foreign financial reporting more than any other Regulation G,8 and Form 8–K,9 under issuer other than a foreign government except an set of standards would be eligible to issuer that meets the following conditions: (1) More the Securities Exchange Act of 1934 (the than 50 percent of the issuer’s outstanding voting elect to use IFRS, beginning with filings ‘‘Exchange Act’’).10 In Regulation S–X, securities are directly or indirectly held of record in 2010. we propose to amend Rules 1–01,11 1– by residents of the United States; and (2) any of the DATES: Comments should be received on 02,12 3–10,13 4–01 14 and 8–01,15 and to following: (i) the majority of the executive officers or directors are United States citizens or residents; or before February 19, 2009. (ii) more than 50 percent of the assets of the issuer ADDRESSES: Comments may be 1 17 CFR 210.1–01–210.12–29. Regulation S–X are located in the United States; or (iii) the business submitted by any of the following sets forth the form and content of requirements for of the issuer is administered principally in the financial statements. United States. methods: 2 17 CFR 229.10 et seq. 17 As explained in Section V.B. below, inclusion Electronic Comments 3 17 CFR 230.400 et seq. of foreign private issuers in Article 13 will not 4 15 U.S.C. 77a et seq. change the content of their financial statements • Use of the Commission’s Internet 5 17 CFR 240.12b–2. filed under Form 20–F. comment form (http://www.sec.gov/ 6 17 CFR 240.13e–100. 18 17 CFR 229.10. rules/proposed.shtml); or 7 17 CFR 240.14d–100. 19 17 CFR 229.101. • Send an e-mail to rule- 8 17 CFR 244 et seq. 20 17 CFR 229.301. 21 [email protected]. Please include File 9 17 CFR 249.308. 17 CFR 229.504. 10 22 17 CFR 229.1100. Number S7–27–08 on the subject line; 15 U.S.C. 78a et seq. 11 17 CFR 210.1–01. 23 17 CFR 229.1112. or 12 24 • 17 CFR 210.1–02. 17 CFR 229.1114. Use the Federal Rulemaking ePortal 13 17 CFR 210.3–10. 25 17 CFR 229.1115. (http://www.regulations.gov). Follow the 14 17 CFR 210.4–01. 26 17 CFR 230.405. instructions for submitting comments. 15 17 CFR 210.8–01. 27 17 CFR 244.101. VerDate Aug<31>2005 15:31 Nov 20, 2008 Jkt 217001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\21NOP2.SGM 21NOP2 dwashington3 on PRODPC61 with PROPOSALS2 Federal Register / Vol. 73, No. 226 / Friday, November 21, 2008 / Proposed Rules 70817 b. Relationship to the Accounting Standard B. Proposal A: Reconciled Information has the potential to best provide the Setting Process Pursuant to IFRS 1 common platform on which companies IV. Proposal for the Limited Early Use of 1. Expected Benefits can report and investors can compare IFRS Where This Would Enhance 2. Expected Costs financial information. Comparability for U.S. Investors C. Proposal B: Supplemental U.S. GAAP This proposed Roadmap first A. Eligibility Requirements Information B. Staff Letter of No Objection to the Use 1. Expected Benefits addresses the basis for considering the of IFRS 2. Expected Costs mandatory use of IFRS by U.S. issuers. C. Transition IX. Regulatory Flexibility Act Certification It then sets forth seven milestones D. Alternative Proposals for U.S. GAAP X. Consideration of Impact on the Economy, which, if achieved, could lead to the use Information Burden on Competition and Promotion of IFRS by U.S. issuers in their filings 1. Proposal A—Reconciled Information of Efficiency, Competition and Capital with the Commission.31 The Pursuant to IFRS 1 Formation Commission in 2011 would determine 2. Proposal B—Supplemental U.S. GAAP XI. Proposed Amendments to the Codification of Financial Reporting whether to proceed with rulemaking to Information require that U.S. issuers use IFRS 3. Discussion of Proposals A and B Policies V. Discussion of Proposed Amendments XII. Statutory Basis and Text of Proposed beginning in 2014 if it is in the public A. The Use of IFRS Financial Statements Amendments interest and for the protection of investors to do so. These milestones in Commission Filings by Eligible Issuers I. Overview 1. Proposed Amendments to Rule 4–01 of relate to: Regulation S–X The Commission is proposing this • Improvements in accounting 2. Proposed Definition of ‘‘IFRS Issuer’’ Roadmap towards requiring the use of standards; B.
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