Tag Archives: SEC

XBRL US Publishes Proposal to Improve XBRL Filings and a Few Reminders

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The SEC requirement to provide XBRL submissions with filings that include registrants’ financial statements (including of course Forms 10-K, 10-Q and 8-K’s that include full financial statements) is one of the issues we discuss in all our workshops. Most of these discussions are about “problems” and “issues” companies have with XBRL. Some of the most frequently raised issues are inconsistency in tagging and creating unnecessary extensions.

Few would question the need for addressing these issues in tagging to make XBRL data more usable. XBRL US and the FASB, (FASB maintains the taxonomies for US GAAP), have both been working on projects to improve tagging.

XBRL US Proposed Guidance and Validation Rules

XBRL US, the non-profit group that has as its mission:

“to support the implementation of XML business reporting standards through the development of taxonomies for use by U.S. public and private sectors, with a goal of interoperability between sectors, and by promoting XBRL adoption through marketplace collaboration”,

has proposed several rules relating to the use of XBRL. These rules are being exposed for public comment through September 14, 2015. You can review the proposed rules which deal with topics such as “element values are equal” and “negative values” at:

xbrl.us/home/data-quality/public-review/

If you have not read about the history and development of XBRL, you could also check out this part of the XBRL US web page:

xbrl.us/home/about/

FASB Simplification Project and Related Improvement Projects

We have blogged before about this FASB project to make the taxonomies easier to use and hence improve the quality of information. The staff has made progress in some areas such as removing unused tags. The latest update on the simplification project for the US GAAP taxonomies is at:

www.fasb.org/cs/ContentServer?c=Page&pagename=FASB%2FPage%2FSectionPage&cid=1176164417675#taxonomy_simplification

If you scroll around the page linked to above, you can also read about projects where the FASB is focusing on improving the taxonomy in targeted areas such as fair value disclosures and pensions.

FASB Implementation Guides

The FASB XBRL Staff has also issued a significant number of Implementation and Reference guides to use in XBRL tagging. You can find all of them, ranging from topics such as segment reporting to subsequent events, at:

www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176160665046

SEC XBRL Documents

Lastly, in the XBRL world, just in case you haven’t heard about them, the SEC has issued two documents about the use of XBRL, a “Dear CFO Letter” about calculation structures and a DERA study about the use of extensions. We blogged about them a while back and you can review them by looking back to our post of September 2, 2014.

As always, your thoughts and considerations are welcome!

 

 

 

 

 

Non-GAAP Measures – The Next Chapter – Is it a Good Day to Non-GAAP?

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In several of our previous posts we have been exploring the guidance for the use of non-GAAP measures along with some areas where the SEC finds problems and hence writes non-GAAP measure comments.

This next chapter is about removing items considered unusual or infrequent. Many companies use such measures in order to present what they believe is a more “normal” or “recurring” earnings number and trend.

This is not a simple issue in any way shape or form. It is clear investors place significant value on this information. It is also clear that some companies push this presentation too far.

As an example, suppose a company has recorded a restructuring charge in the current quarter and in their earnings release and MD&A in Form 10-Q management wants to present a picture of earnings without this restructuring charge.

What are the SEC’s rules about such measures? Reg G of course applies to the earnings release, and does not prohibit such an adjustment. As we reviewed in our earlier posts, Regulation S-K Item 10(e) is the source of the SEC’s guidance about the use of non-GAAP measures in filed documents:

(e)(ii) A registrant must not:

(A) ———Omitted————-

(B) Adjust a non-GAAP performance measure to eliminate or smooth items identified as non-recurring, infrequent or unusual, when the nature of the charge or gain is such that it is reasonably likely to recur within two years or there was a similar charge or gain within the prior two years;

You can read the complete Item in our post of June 5, 2015 or at:

www.ecfr.gov/cgi-bin/text-idx?SID=8e0ed509ccc65e983f9eca72ceb26753&node=17:3.0.1.1.11&rgn=div5#se17.3.229_110

When S-K Item 10(e) was originally created as part of the SOX regulatory revisions the language in this paragraph was interpreted as essentially prohibiting performance measures with adjustments for unusual or infrequent items in filed documents. While many companies would include such adjustments in non-GAAP measures in earnings releases, because the SEC was very active with comments in this area, rarely would they appear in MD&A in filed documents.

(Note: You can check our post of May 7, 2015 to review the difference between filed and furnished.)

To clarify their position about this issue the SEC has issued several Compliance and Disclosure Interpretations about the use of non-GAAP measures:

www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm

Here is the relevant C&DI:

Question 102.03

Question: Item 10(e) of Regulation S-K prohibits adjusting a non-GAAP financial performance measure to eliminate or smooth items identified as non-recurring, infrequent or unusual, when the nature of the charge or gain is such that it is reasonably likely to recur within two years or there was a similar charge or gain within the prior two years. Is this prohibition based on the description of the charge or gain, or is it based on the nature of the charge or gain?

Answer: The prohibition is based on the description of the charge or gain that is being adjusted. It would not be appropriate to state that a charge or gain is non-recurring, infrequent or unusual unless it meets the specified criteria. The fact that a registrant cannot describe a charge or gain as non-recurring, infrequent or unusual, however, does not mean that the registrant cannot adjust for that charge or gain. Registrants can make adjustments they believe are appropriate, subject to Regulation G and the other requirements of Item 10(e) of Regulation S-K. [Jan. 11, 2010]

So, lets go back to our example company where management wants to add this charge back to show operations on a more “recurring” basis. Management could add the restructuring charge back to net income in the company’s earnings release and the MD&A of the related 10-Q. In the 10-Q Regulation S-K Item 10 would apply, and the company would have to consider how to describe the restructuring change. If the company had such a charge in the last two years or reasonably expected such a charge in the next two years then they could still adjust for it in the non-GAAP measure, but they could not describe it as non-recurring, infrequent or unusual.

Do companies always follow this guidance? Unfortunately NOT! Here is an example:

In the fourth bullet point of the second paragraph of this section you present a non-GAAP measure of the increase in SG&A adjusted for “one-time unusual items” as a percentage of net sales. You indicate that the one-time unusual items are acquisition, integration, spin-off and restructuring related costs, but we note that you have recorded similar costs in the last three fiscal years. Item 10(e)(1)(ii) of Regulation S-K prohibits adjusting a non-GAAP performance measure to eliminate or smooth items identified as non-recurring, infrequent or unusual when the nature of the charge or gain is such that it is reasonably likely to recur within two years or there was a similar charge or gain within the prior two years. Please explain why you believe these adjustments are non-recurring in nature or revise similar presentations in future filings to refrain from characterizing these adjustments as “non-recurring.” Please refer to question 102.03 of our Non-GAAP Financial Measures Compliance and Disclosure Interpretation, available at http://www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm.

Disclosure Simplification? That was too easy for GE, they went so much further!

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In one of our June workshops a participant brought the most recent GE Form 10-K into the group’s discussions. GE has dramatically redesigned their Form 10-K to be a communication focused document.

If it weren’t for the cover page, most SEC reporting professionals would not even recognize this filing as a 10-K. Right after the cover page is a picture of a GE worker and this is followed by an executive summary. It looks like an annual report to shareholders at first, but no, it is the ACTUAL FORM 10-K! It even has colors!

The document is organized differently to tell GE’s story in a meaningful and engaging way. When you think Form 10-K you usually think of a lock-step structure of Parts and Items, and this structure does not appear at all in this narrative document. GE has used General Instruction C.1. in a very innovative way. This instruction says:

  1. Preparation of Report.
    1. (1)  This form is not to be used as a blank form to be filled in, but only as a guide in the preparation of the report on paper meeting the requirements of Rule 12b-12. Except as provided in General Instruction G, the answers to the items shall be prepared in the manner specified in Rule 12b-13.

GE completely redesigned the structure and the flow. GE did not follow the lock-step format of the Form 10-K Parts and Items. Instead they reorganized the content into a logical structure and flow. In addition, you will see a variety of font sizes and headings, pictures, graphics and other tools to make information easier to follow and understand. (All of course looking back to the concepts of Plain English.)

When we here at the blog first read the document we wondered how it could even be grounded in the Form 10-K instructions, but check out page 231. Here is the linkage to the instructions. In the order of the Parts and Items in the Form 10-K instructions GE cross references to where the required disclosures are in their new 10-K.

The investment in improvement and change in this document is, well, WOW!

You can find the 10-K at:

www.ge.com/ar2014/assets/pdf/GE_2014_Form_10K.pdf

As always, your thoughts and comments are welcome and appreciated!

A Bit of Perspective about Clawbacks in the News

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If you are involved in SEC reporting, you have likely been hearing about clawbacks of executive compensation. The SEC, as required by Dodd/Frank, has proposed a new rule about clawbacks. You can see the SEC’s press release about the proposed rule at:

www.sec.gov/news/pressrelease/2015-136.html

The press release also has a good summary of the proposal and a link to the text of the proposed rule. (The link is near the top of the press release on the right side of the page.)

This rule proposal has created a fair amount of commentary and discussion, as anyone would expect.

That said, courtesy of Section 304 of SOX, clawbacks have been in play before this proposed rule. And this SOX provision has some teeth. Diebold Corporation, in the wake of a settled accounting fraud enforcement action, was required to clawback compensation from its CEO. Here is an interesting quote from the press release announcing the various enforcements:

“The complaint does not allege that (the CEO) engaged in the fraud.”

You can read the release at:

www.sec.gov/litigation/litreleases/2010/lr21543.htm

So, what is the reason that Dodd/Frank requires more rule making about clawbacks? One of the principal differences concerning clawbacks between Dodd/Frank and SOX is that SOX requires clawbacks when a restatement arises from accounting fraud.

Dodd/Frank moves things to a higher level because it will require clawbacks for any material restatement, regardless of cause. So even an unintentional error will trigger a clawback requirement.

In a sense, this is a bit like the SOX whistleblower hotline compared to the Dodd/Frank whistleblower hotline. SOX requires an anonymous hotline to the audit committee, Dodd/Frank goes a step further and created the anonymous hotline directly to the SEC.

As always, your thoughts and reactions are welcome!

 

Non-GAAP Measures – The SAGA continues – Full non-GAAP Financial Statements?

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In our last two posts we reviewed the two sources of SEC guidance for the use of non-GAAP measures:

Reg G for non-filed documents such as earnings releases, and

Reg S-K Item 10(e) for non-GAAP measures included in filed documents such as in the MD&A of Form 10-K.

We also explored issues in the definition of a non-GAAP measure, which can be complex for some operational measures such as revenue per employee and same store sales.

In our next few posts we will discuss areas where companies sometimes push the use of non-GAAP measures a bit too far. When this happens, as you would expect, the SEC frequently writes comments about these issues.

The first is something that has happened frequently when companies want to show what their F/S would look like without certain non-cash charges. A very common example is share based payment expense. Since share based payments can affect a number of lines in the F/S companies will sometimes present an entire F/S, for example an Income Statement, on a non-GAAP basis.

In the view of the SEC their non-GAAP measure guidance allows the presentation of individual measures, but it does not permit this kind of full financial statement presentation. In essence, the risk that this could cause investor confusion is too great.

This position is formally stated in a Compliance and Disclosure Interpretation (C&DI). Here is the text:

Question 102.10

Question: Is it appropriate to present a full non-GAAP income statement for purposes of reconciling non-GAAP measures to the most directly comparable GAAP measures?

Answer: Generally, no. Presenting a full non-GAAP income statement may attach undue prominence to the non-GAAP information. [Jan. 11, 2010]

You can find all the C&DI’s for non-GAAP measures at:

www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm

Given this position, when the staff sees this kind of presentation, they do write comments! Here is an example:

  1. We see on page 5 of your earnings release that you present non-GAAP financial measures and related reconciliations required by Item 10(e) of Regulation S-K in the form of non-GAAP income statements. Please tell us how your presentation considers the guidance set forth in Compliance and Disclosure Interpretation 102.10. Under the cited guidance, it is generally not appropriate to present a non-GAAP income statement for purposes of reconciling non-GAAP financial measures to the most directly comparable GAAP financial measures.

And, here is another that has a bit more complexity, but the same theme, and makes the point that gross sales is in fact a non-GAAP measure that should be reconciled to net sales.

  1. We note that you present gross sales less promotional and other allowance figures at the top of your full GAAP income statements on page 48. In addition, you present and discuss gross sales, a non-GAAP measure, prior to the presentation and discussion of net sales, the most comparable GAAP measure, in your selected financial data on page 40 and in your discussion on page 49. Furthermore, it appears that you reconcile gross sales, the non-GAAP measure, to net sales, the most directly comparable GAAP measure, by presenting this reconciliation in a full non-GAAP income statement which is generally not considered appropriate as it may attach undue prominence to the non-GAAP measure, gross sales. Please revise future filings to present and discuss the GAAP measure net sales, more prominently than the non-GAAP measure, gross sales. In addition, any reconciliation of the two measures should not be included on your full income statement as this may result in presentation of a full non-GAAP income statement. Refer to the guidance outlined in Item 10(e) of Regulation S-K and Question 102.10 of Staff’s Compliance & Disclosure Interpretation on Non-GAAP Financial Measures at http://www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm

As always, your thoughts and comments are appreciated!

 

Non-GAAP Measures – Part Two – Some Definitional Issues

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In our last post we discussed the use of non-GAAP measures and the two sources of guidance the SEC has issued concerning their use, Reg G and S-K Item 10(e). In our next few posts we will delve into some of the common problems companies encounter in the use of non-GAAP measures.

The first application issue would seem to be pretty straightforward, just what is a non-GAAP measure? Both Reg G and S-K Item 10(e) use the same definition:

“(2) For purposes of this paragraph (e), a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position or cash flows that:

(i) Excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or

(ii) Includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

(3) For purposes of this paragraph (e), GAAP refers to generally accepted accounting principles in the United States, except that:

(4) For purposes of this paragraph (e), non-GAAP financial measures exclude:

(i) Operating and other statistical measures; and

(ii) Ratios or statistical measures calculated using exclusively one or both of:

(A) Financial measures calculated in accordance with GAAP; and

(B) Operating measures or other measures that are not non-GAAP financial measures.

(5) For purposes of this paragraph (e), non-GAAP financial measures exclude financial measures required to be disclosed by GAAP, Commission rules, or a system of regulation of a government or governmental authority or self-regulatory organization that is applicable to the registrant. However, the financial measure should be presented outside of the financial statements unless the financial measure is required or expressly permitted by the standard-setter that is responsible for establishing the GAAP used in such financial statements.”

There is a lot of technical detail included in this definition! Two common questions are:

  1. Is a measure such as “comparable store sales” a non-GAAP measure?

As is the case in many questions like this, the answer is “it depends”! Paragraph 4 above says that if a measure is computed with an operating measure that is not a non-GAAP measure (such as number of stores) and a GAAP financial measure, (such as sales), then it is not a non-GAAP measure.

However, if the sales number was somehow “adjusted”, for example to eliminate start-up period sales or to remove the impact of an unusual event, so that the sales number was a non-GAAP measure, then the comparable stores sales number would be a non-GAAP measure.

  1. My operating segment footnote includes measures that are non-GAAP measures (for example EBITDA) because we use them to evaluate operating segment performance. Do these disclosures fall into the non-GAAP disclosure requirements of S-K Item 10(e) or Reg G?

This one is pretty simple. As paragraph 5 above says disclosures of measures like EBITDA that are used to evaluate operating segments where the disclosure is required by GAAP are not non-GAAP measures, so reconciliations and other S-K Item 10(e) and Reg G disclosures are not required unless of course they are required by GAAP.

As always, your thoughts and comments are appreciated!

 

The CAQ – Why You Need to Know Who They Are!

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Do you know where the SEC initially stated their position about transitioning to the 2013 Revised COSO framework? It was in September of 2013. Here is the path to that announcement.

One of the topics we discuss in our workshops is the importance of the “CAQ” in the financial reporting process. The CAQ is an important source of information about current positions and developments at the SEC. Surprisingly, we frequently discover that many people are not very familiar with this organization.

So, what is the CAQ? It is, in long form, The Center For Audit Quality.

Their web page is thecaq.org

At their home page you can learn about who they are:

“The Center is an autonomous, nonpartisan, nonprofit group based in Washington, D.C. It is governed by a Board that comprises leaders from the public company auditing firms, the American Institute of CPAs and three members from outside the public company auditing profession. The organization is affiliated with the American Institute of CPAs.”

And what they do:

“The Center for Audit Quality is dedicated to enhancing investor confidence and public trust in the global capital markets by:

  • Fostering high quality performance by public company auditors;
  • Convening and collaborating with other stakeholders to advance the discussion of critical issues requiring action and intervention;
  • Advocating policies and standards that promote public company auditors’ objectivity, effectiveness and responsiveness to dynamic market conditions.”

One really important part of this organization is The CAQ SEC Regulations Committee. This group meets periodically with the SEC staff, generally once each quarter for the first three quarters of the year, and discusses current accounting and disclosure issues. The home page for the committee is:

thecaq.org/resources/caq-committees/sec-regulations

The minutes of these meetings are published on the Committee’s webpage and frequently contain information that, while sometimes fairly narrow, is helpful in the financial reporting process.

For example, it was at a CAQ meeting that the SEC Staff early on stated their position about the transition to the 2013 COSO Framework. Here is a link to those minutes: (Check out page 6)

thecaq.org/docs/reports-and publications/2013septembe25jointmeetinghls.pdf?sfvrsn=0

The most recent highlights of the SEC Regulations Committee meeting with the Staff are at:

www.thecaq.org/docs/default-source/sec-regulation-committee-hightlights/sec-regulations-committee-highlights-march-31-2015.pdf?sfvrsn=0

This meeting addressed issues ranging from the reporting implications of the FASB’s new consolidation standard, ASU 2015-02, to the application of S-X Rule 3-14 to real estate acquisitions in prior years for a registration statement.

Yes, many of the issues are narrow and technical, but we suggest you check the CAQ minutes each quarter as you get ready to close!

As usual, your comments and thoughts are appreciated!

SEC Comment of the Week: To GAAP or non-GAAP, aye, that is the question….

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Or – There is more than Reg G!

The use of Non-GAAP financial measures has a long and storied history. Non-GAAP disclosures always seem to engender controversy and questions. While there is no doubt that they are widely used and important to many investors, unfortunately they are sometimes misused, and can even result in enforcement action. Check out this enforcement release against Trump Hotels and casinos as a great example of what not to do:

www.sec.gov/news/headlines/trumphotels.htm

During our workshops we frequently find that there is more than a bit of confusion over the SEC’s guidance for the use of non-GAAP measures. Most SEC Reporting professionals know about “Reg G” and it’s guidance, but that is not the only place the SEC has non-GAAP measure rules. (Note: It was in 2002 that the Title IV of the SOX Act gave the SEC the power and responsibility to regulate the use of “pro forma figures”, later renamed non-GAAP measures.)

Regulation G is the SEC rule that applies when a non-GAAP measure is included in a document that is not filed with the SEC such as an earnings release.

Regulation S-K Item 10(e), which is not as well understood, is additional guidance that must be followed if a non-GAAP measure is included in a filed document, such as in MD&A in Form 10-K and 10-Q or in CD&A in a proxy statement.

This difference is not always well understood and does result in SEC Comments. (There is an example comment to a company that did not follow S-K Item 10’s guidance below)

What is the Difference?

Reg G, the rule for non-filed documents such as an earnings release or an investor presentation, is in essence very simple. You can find Reg G at:

www.ecfr.gov/cgi-bin/text-idx?SID=8e0ed509ccc65e983f9eca72ceb26753&node=17:4.0.1.1.5&rgn=div5

The nuts and bolts of Reg G are fairly straightforward:

“(a) Whenever a registrant, or person acting on its behalf, publicly discloses material information that includes a non-GAAP financial measure, the registrant must accompany that non-GAAP financial measure with:

(1) A presentation of the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP); and

(2) A reconciliation (by schedule or other clearly understandable method), which shall be quantitative for historical non-GAAP measures presented, and quantitative, to the extent available without unreasonable efforts, for forward-looking information, of the differences between the non-GAAP financial measure disclosed or released with the most comparable financial measure or measures calculated and presented in accordance with GAAP identified in paragraph (a)(1) of this section.”

There is also an anti-fraud provision to prevent measures that are misleading. A company cannot knowingly lie or omit a material fact in disclosure of a non-GAAP measure. The definition of a non-GAAP measure is also in the rule. (We will explore this definition in our next post!)

Regulation S-K item 10 (e), the source of guidance for non-GAAP measures used in filed documents, has more required disclosure about “why’s” behind the use of non-GAAP measures and some specific rules about things that can’t be done with non-GAAP measures. It does require essentially the same things as Reg G, but then adds additional requirements. Here is its core:

First, if a company uses a non-GAAP measure in a filed document, S-K Item 10(e) requires four things:

“(A) A presentation, with equal or greater prominence, of the most directly comparable financial measure or measures calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP);

(B) A reconciliation (by schedule or other clearly understandable method), which shall be quantitative for historical non-GAAP measures presented, and quantitative, to the extent available without unreasonable efforts, for forward-looking information, of the differences between the non-GAAP financial measure disclosed or released with the most directly comparable financial measure or measures calculated and presented in accordance with GAAP identified in paragraph (e)(1)(i)(A) of this section;

(C) A statement disclosing the reasons why the registrant’s management believes that presentation of the non-GAAP financial measure provides useful information to investors regarding the registrant’s financial condition and results of operations; and

(D) To the extent material, a statement disclosing the additional purposes, if any, for which the registrant’s management uses the non-GAAP financial measure that are not disclosed pursuant to paragraph (e)(1)(i)(C) of this section”

In addition to these four requirements, the first two of which are almost the same as Reg G, S-K Item 10 has five prohibitions. A company cannot:

(A) Exclude charges or liabilities that required, or will require, cash settlement, or would have required cash settlement absent an ability to settle in another manner, from non-GAAP liquidity measures, other than the measures earnings before interest and taxes (EBIT) and earnings before interest, taxes, depreciation, and amortization (EBITDA);

(B) Adjust a non-GAAP performance measure to eliminate or smooth items identified as non-recurring, infrequent or unusual, when the nature of the charge or gain is such that it is reasonably likely to recur within two years or there was a similar charge or gain within the prior two years;

(C) Present non-GAAP financial measures on the face of the registrant’s financial statements prepared in accordance with GAAP or in the accompanying notes;

(D) Present non-GAAP financial measures on the face of any pro forma financial information required to be disclosed by Article 11 of Regulation S-X (17 CFR 210.11-01 through 210.11-03); or

(E) Use titles or descriptions of non-GAAP financial measures that are the same as, or confusingly similar to, titles or descriptions used for GAAP financial measures…

So far we have discussed and recapped a lot of information. All of that leads to this example SEC staff comment about the use of non-GAAP measures.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 27

  1. We note that you present certain non-GAAP financial measures, including constant currency revenues, gross profit excluding the impacts of the MDP transaction and the exchange, SG&A expense excluding certain costs as a percentage of revenue, and consolidated adjusted EBITDA. Please revise future filings to include all of the disclosures required by Item 10(e)(1)(i) of Regulation S-K for all non-GAAP measures included in your presentation.

This one is as simple as knowing the difference between Reg G and S-K Item 10!

As always, your thoughts and comments are appreciated!

It’s Conference Time!

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Our four Midyear SEC and FASB Forums are underway! This picture is from our Chicago Conference on May 28 and 29. In June the Forums will take place in New York and San Francisco. Check out the dates, agenda and speakers at:

http://www.pli.edu/Content/30th_Midyear_SEC_Reporting_FASB_Forum/_/N-1z12892Z4k?ID=231682

All the programs are chaired by Carol Stacey and bring you up to date with all important developments and current issues at the SEC, FASB and PCAOB.

IFRS Wherefore art thou? – A May Update!

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As you likely know, when James Schnurr took the reigns of OCA Chair White asked him to address IFRS. She asked Mr. Schnurr to review the staff’s IFRS work to date and develop a recommendation about “what action, if any, the Commission should take regarding the further incorporation of IFRS into the U.S. capital markets”.

Mr. Schnurr discussed the progress of this review in a May speech. In his remarks he said:

“Some of the key themes we heard from our discussions were as follows:

There is virtually no support to have the SEC mandate IFRS for all registrants.

There is little support for the SEC to provide an option allowing domestic companies to prepare their financial statements under IFRS.

There is continued support for the objective of a single set of high–quality, globally accepted accounting standards.”

He also said he would work to finish his recommendation in the “near term”.

You can read the speech at:

www.sec.gov/news/speech/schnurr-remarks-before-the-2015-baruch-college-financial-reporti.html

As always, your thoughts and comments are appreciated!