The U.S. Securities and Exchange Commission took a step Wednesday toward allowing foreign public companies to choose international accounting standards or U.S. rules when filing data with the agency.
The SEC proposal sets the stage for foreign companies listed in the United States to issue their financial reports using the English version of International Financial Reporting Standards (IFRS) instead of U.S. Generally Accepted Accounting Principles, or GAAP.
The change is part of the SEC’s roadmap to eliminate by 2009 the requirement that foreign companies reconcile their financial statements to U.S. GAAP. It also brings the United States closer to other major financial centers that have embraced international reporting standards.
“Global accounting standards would allow investors to draw better and more accurate comparisons among issuers around the world,” SEC Chairman Christopher Cox said at an agency meeting.