Small companies weigh in on IFRS move

The transition to IFRS is a hot-button issue once again, as the SEC has floated the idea of "condorsement" as a possible path to adoption in the United States.


For small companies, the big issue has long been a rather simple one: Why? For these companies, the switch will be painful and suck up more resources given that they are not nearly as well positioned to embrace the new standard as are the big multinational companies. The MNCs have already started to file under the international standard in many cases.

At a recent event, as noted by CFO.com, small companies sounded off on the potential condorsement path by noting that they would prefer a Big Bang approach. That is, they would prefer a date certain deadline by which they were be forced to comply, to the hit all at once.
The alternative, they fear, is a dribbled-out approach that would force them into a long-term effort to muddle through that ultimately would be very costly and distracting. One CFO called this approach "death by increments."

One issue here is whether smaller companies will be given a different adoption schedule than large companies. This is not unusual when it comes to onerous regulations. Recall that nonaccelerated files were given a series of reprieves on Section 404(b) of Sarbanes-Oxley, which allowed them to escape the provision for many years. Ultimately, they were given a permanent reprieve. Non accelerated files were also given an temporary exemption from various proxy rules required by Dodd-Frank. So we may see something similar with IFRS.