Now that the IFRS road map comment letter period has closed, SEC staffers are assessing the letters and (presumably) will soon make a recommendation to their leaders on next steps. The SEC then will meet publicly and discuss the staff’s recommendations.

“Those recommendations,” notes D.J. Gannon, national leader of Deloitte’s IFRS Center of Excellence, “would address finalizing the road map, which is expected to be published as part of the SEC’s Codification of Financial Reporting Policies, and the early use proposal. Any decision to mandate the use of IFRS will require a separate rule proposal.”

Gannon does not expect to hear too much from the SEC until later this year, after the G-20 weighs in with recommendations on the issue.

Until then, how prepared are U.S. companies — and how prepared should they be — for adoption?

U.S. companies are much more prepared than they were 12 months ago, according to a March Deloitte survey. However, 64 percent of respondents to this survey indicated that they have not allocated any budget for IFRS conversion activities.

I asked Gannon to identify a couple of steps CFOs and corporate finance functions can take now to ease the future implementation burden. Here’s what he said:

First, CFOs should be talking to their boards of directors and audit committees about IFRS. Keeping the board and audit committee apprised of what’s happening at the SEC, and what IFRS means for the organization, is critical.

Also, it’s important for the CFO to form a multifunctional team to begin to understand how IFRS will impact the company. Getting a handle on not only the key accounting impacts, but also the systems and process, technology, and operational issues, is important.

Performing an initial assessment to determine what must be done now vs. later will be important for developing an IFRS road map. Address questions such as: Does IFRS currently apply to any subsidiaries, joint ventures, or equity investments? What current key initiatives will be impacted by IFRS? What are the key accounting differences between IFRS and U.S. GAAP? ###