I got off the phone with Kevin Callahan of the SEC press office at 6 p.m. ET on Friday. He seems very sincere. After communicating a couple of times via e-mail, I have no doubt about his belief in the things he said.
He said that there is no science as to how long it takes from a Commission vote of approval to when it is ready for publication in the Federal Register. He said that it might take just a bit more than a week, or it could take a couple of months. It all depends on the complexity of the issue and the number of SEC departments that are involved.
Although he did not have a copy of a draft of the proposal in front of him, he kept directing me to the first paragraph of the August 27 press release that announces the proposal: SEC Proposes Roadmap Toward Global Accounting Standards to Help Investors Compare Financial Information More Easily. FOR IMMEDIATE RELEASE 2008-184
Washington, D.C., Aug. 27, 2008 – The Securities and Exchange Commission today voted to publish for public comment a proposed Roadmap that could lead to the use of International Financial Reporting Standards (IFRS) by U.S. issuers beginning in 2014. Currently, U.S. issuers use U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Commission would make a decision in 2011 on whether adoption of IFRS is in the public interest and would benefit investors. The proposed multi-year plan sets out several milestones that, if achieved, could lead to the use of IFRS by U.S. issuers in their filings with the Commission.
So, there are two things to keep separate. There is a proposed developmental journey (what the SEC terms the road map) to take place 2008-2011, and an eventual final decision to be made in 2011.
He said that all the Commission has approved at this point is putting the proposed road map up for public comment. They have not approved the events of the next three years, but proposed milestones for between now and 2011 to prepare for Commission’s ultimate decision on IFRS. He said that the specific issues for which public comment is being elicited, as well as to the uses of these comments, would be detailed in the published proposal. He said in general that public input is being elicited on the road map and on the decision in the long run (2011).
Since I’m a professor reputedly good at explaining things, this is how I understand his comments. I think he means that what the Commission has approved at this point is pretty limited. They have not approved setting in motion any processes that could lead to realizing milestones. But they have approved the set of milestones (or important developments) they want or prefer to see in the future, upon which they believe future decisions will hinge. I think he implied that there definitely is to be a road map, but the particulars could depend on the public comments, but perhaps I’m wrong on this. I’m sure it will all be made cleaer in the published proposal.
He was quite clear that neither contemporary events nor political issues speculated upon in recent on-line articles (CFO, ConcurringOpinions, The Summa, etc.) are having any influence on what I called the “apparent delay.” He emphasized that there is no delay, it is simply a matter of getting the report ready for publication.
He concluded by saying that its publication could be expected within three weeks.
I think this trumps my earlier journey into fantasy land– “Cold Feet, Mr. Cox?”
Over and out – – David Albrecht