classification system, but not another. If companies in an industry
that are eligible under one classification system switch to IFRS,
this action may result in IFRS then being used more often than any
other set of standards within a separate industry, under a different
classification system. This effect results in an expansion of
eligibility across industries as U.S. companies switch to IFRS.
---------------------------------------------------------------------------

    Only eligible U.S. issuers, which we expect would be limited in
number, would be permitted to file financial statements with the
Commission that are prepared in accordance with IFRS. Of this limited
number of eligible issuers, we believe few would be in a position to
file IFRS financial statements with the Commission immediately upon
adoption of the proposed rules. This is because we understand that
there are few U.S. issuers that have already prepared IFRS financial
statements for any other purpose. In order to avail themselves of the
IFRS alternative, eligible U.S. issuers would need to (1) make a
submission to the Commission and obtain a letter of no objection as
described in Section IV., (2) work through the first time adoption
requirements of IFRS, (3) apply IFRS to the preparation of their
financial statements for the entire period called for in our
filings,\186\ (4) make the necessary disclosures proposed in Section
V.D.3., and (5) provide the supplemental U.S. GAAP information required
under Proposal B, if adopted.
---------------------------------------------------------------------------

    \186\ As noted, this period is generally three years.
---------------------------------------------------------------------------

    Our proposed rules to allow for the limited use of financial
statements prepared using IFRS, if adopted, may foster the use of IFRS
as issued by the IASB as a way of moving to a single set of globally
accepted accounting standards. This effect would be strengthened by
potential network effects of the proposed amendments: The more issuers
that use IFRS as issued by the IASB, the greater the incentive for
other issuers to do so.
    The cost-benefit analysis analyzes separately three components of
the proposed rules. The first component is the acceptance of IFRS
financial statements from U.S. issuers under the proposed eligibility
criteria. The second component is Proposal A, under which U.S. issuers
adopting IFRS would only be required to provide the reconciling
information from U.S. GAAP to IFRS called for under IFRS 1. The third
component is Proposal B, under which U.S. issuers adopting IFRS would,
in addition to providing the reconciling information called for under
IFRS 1, disclose on an annual basis certain unaudited supplemental U.S.
GAAP financial information covering the financial statements included
in an annual report, including the current year.

A. Proposal for Early Use of IFRS by U.S. Issuers

1. Expected Benefits
    In industries with a large number of companies using IFRS, allowing
U.S. issuers to move to IFRS could help eliminate the principal source
of accounting differences within the industry and potentially enhance
comparability within the industry, improving the ability of investors
to allocate capital. Thus, if a large percentage of companies use IFRS,
allowing U.S. issuers to use IFRS could potentially benefit investors
by improving the comparability of companies within the industry. If
investors prefer IFRS and we do allow a switch to IFRS, then a U.S.
issuer may experience an increased following in the marketplace. In
contrast, if an industry consists primarily of companies using other
bases of accounting, particularly bases of accounting that produce
results more comparable to U.S. GAAP than to IFRS, allowing U.S.
issuers to move to IFRS would not improve comparability--investors
would still need to interpret multiple bases of accounting to perform
within-industry comparisons.
    Comparability within any set of accounting standards depends on
consistent interpretation and application across jurisdictions. In
particular, potential benefits of the proposed rule relating to
increased within-industry comparability across jurisdictions depend on
the consistent interpretation and application of IFRS. Such benefits
may be limited to the extent that, for example, foreign

companies use local variations of IFRS as issued by the IASB.
Transparent disclosure about the nature and effect of variations from
IFRS as issued by the IASB may offset some of these limitations to
benefits in comparability. In recognition of the benefits associated
with consistent application of IFRS, the proposed rule makes
eligibility contingent on use of IFRS as issued by the IASB by a large
number of companies in the industry.
    The utility for investors of a set of accounting standards
increases as the number of issuers using it increases. Investors reap a
benefit from the network effects caused by numerous individual issuers
each deciding to use IFRS. To the extent an issuer switching to IFRS
does not internalize the full benefits of any such network effects,
such issuer is expected to be less likely to switch even if eligible to
do so.
    The benefits associated with a set of accounting standards are
dependent upon the quality of the standards, including how the
standards are applied in practice. Factors that could affect the
quality of IFRS are both institutional with respect to the IASC
Foundation, including its governance and funding, as well as
operational with respect to the actual standard setting process of the
IASB. We recognize that our relationship with the IASB is currently
less direct than our relationship with the FASB. Further, constituents
of the IASB are greater in number and more varied than the constituents
of the FASB. The result is that our view--based on U.S. constituents--
is one of many views that the IASB receives from around the world and
considers when developing future standards. As the IASB must prioritize
the needs of its various constituents, including investors, the
timeliness in which improvements or development of standards occur of
particular relevance or importance to our issuers and markets could be
affected.
    The use of IFRS by a limited number of U.S. issuers in industries
in which IFRS is used more often than any other set of standards would
provide some empirical basis for evaluating, among other things, the
cost of converting to IFRS. Early adoption of IFRS will generate
information for regulators, including the Commission, to be used in
further decision making. Using IFRS would also give U.S. investors the
opportunity to better understand and compare the financial reports of
U.S. and foreign issuers if all of their reports are prepared in
accordance with IFRS. This effect may not be immediate because it may
take time for U.S. investors to become familiar with working with
financial results reported under IFRS.
    Over the longer term, if all other things are equal, the increased
worldwide demand for the securities of U.S. issuers using IFRS could
make their capital more efficiently priced. This effect is contingent
on the degree to which foreign investors can use IFRS more effectively
than U.S. GAAP. While U.S. GAAP is accepted worldwide, foreign
investors may become increasingly familiar with IFRS and may be more
likely to make their decisions to invest in U.S. issuers contingent on
use of IFRS by those issuers. Currently, U.S. issuers, using
exclusively U.S. GAAP, comprise a large portion of worldwide equity
market capitalization, and foreign investors likely have a
correspondingly thorough understanding of U.S. GAAP. This percentage
may decrease as foreign equity markets continue to develop, and it may
become less advantageous for foreign investors to maintain this level
of understanding.
    Some U.S. issuers currently may use IFRS in addition to U.S. GAAP.
For example, some foreign subsidiaries of U.S. issuers may be required
to use IFRS. Under the proposed rules, any such issuer who is eligible
and elects to adopt IFRS may need fewer resources to prepare Commission
filings. Investors may benefit from this to the extent that an issuer
can realize cost savings from having the parent company and all its
subsidiaries use one basis of accounting.
    As discussed in the 2007 Proposing Release and in Section III.B.4.,
above, IFRS is not as developed as current U.S. GAAP in certain areas.
IFRS also is not as prescriptive as U.S. GAAP in certain areas and in
certain areas permits a greater amount of allowable options than
currently in U.S. GAAP.\187\ This relatively lesser amount of guidance
and greater optionality may increase issuers' ability to account for
transactions or events in accordance with their underlying economics
but may also result in the application of greater judgment in applying
the standards.
---------------------------------------------------------------------------

    \187\ As noted by CIFiR in its Final Report:
    From an international perspective, we note that IFRS currently
permits numerous alternative accounting policies. While we
acknowledge the IASB's efforts in reducing some of these alternative
treatments, we nonetheless believe the SEC should encourage the IASB
to [* * * ] seek to eliminate alternatives as part of its standards-
setting projects.
    CIFiR Final Report, at 51.
---------------------------------------------------------------------------

2. Expected Costs
    Under the proposed amendments, if adopted, the required financial
information that investors in the U.S. capital markets receive from any
U.S. issuer that avails itself of the option to use IFRS will differ
from what it was previously. This may or may not represent a loss or an
increase of information in absolute terms. Whether there is an absolute
loss or gain in information will depend upon whether IFRS financial
statements yield more or less information, or higher or lower quality
information, about a particular issuer than the U.S. GAAP financial
statements yielded. The usefulness of any omitted U.S. GAAP information
or any additional IFRS information depends on the extent to which the
investor used the U.S. GAAP information provided, if at all, relative
to the extent to which the investor will use the new IFRS information,
if at all.
    Investors are differently situated in the market and have varying
levels of familiarity with IFRS. Consequently, investors may not all
bear the costs or obtain the benefits from the proposed amendments
equally. The extent to which a particular investor may use IFRS
financial information will depend on many factors including the size
and nature of the investor and the industry to which the issuer in
question belongs.
    The proposed amendments, if adopted, may lead to some costs to both
investors and U.S. issuers. If the investor community prefers the
information communicated by U.S. GAAP, then a U.S. issuer that uses
IFRS as issued by the IASB to prepare financial statements may face a
reduced following in the marketplace. Investors that are not
sufficiently familiar with IFRS accounting standards may prefer U.S.
GAAP. In addition, unfamiliarity with IFRS as issued by the IASB may
have an adverse effect on investors' confidence in the reported
results. At a minimum, for those investors who seek to understand
accounting principles, they will bear incremental transitional learning
costs to become familiar with IFRS. While many regard both U.S. GAAP
and IFRS as high-quality sets of accounting standards, the relative
quality of the financial information provided under each set of
standards may differ. Potential costs involved in moving to or
remaining on a set of standards that provides relatively lower quality
information may include reductions in liquidity and pricing efficiency
of the issuers' securities. These effects are related to changes in
information asymmetry between insiders and investors. Any potential
changes in information asymmetry may also affect transaction costs for
issuers in raising capital.
    Companies may choose to adopt IFRS only after concluding the
benefits justify the costs to their investors; alternatively,

because of principal-agent problems inherent in corporate governance,
companies may choose to adopt IFRS after concluding that benefits to
management exceed costs to management. In either calculation, costs to
the company of adopting IFRS play a key role in the analysis. Costs to
adopt IFRS may include those associated with making a submission to the
Commission staff in order to obtain a no objection letter, as described
in Section IV.B.; costs to transition to IFRS reporting, including
determining the effect of first-time adoption under IFRS 1 and systems
changes to support financial reporting in accordance with IFRS; costs
to prepare the disclosures proposed in Section V.D.3. upon initially
reporting under IFRS; and potentially higher costs for accounting
personnel, outside consultants and auditors who are familiar with IFRS.
Additionally, for those issuers currently audited by an accounting firm
without extensive IFRS experience, incremental costs may be incurred in
order to change to an audit firm with a sufficient background in IFRS.
For the companies we estimate to be eligible, based on the data used
for purposes of the Paperwork Reduction Act we estimate the costs for
issuers of transitioning to IFRS to sum to approximately $32 million
per company and relate to the first three years of filings on Form 10-K
under IFRS. Total estimated costs for the approximate minimum of 110
issuers estimated to be eligible would therefore be approximately $3.5
billion. We expect that the majority of these transition costs would be
incurred primarily in preparation of filings for the first year in
which an issuer reports with the Commission using IFRS.\188\ These
estimates will continue to be re-evaluated during the comment period as
more information is known.
---------------------------------------------------------------------------

    \188\ Specifically, we assume that per-year costs decline by 75%
in the second year and by 90% in the third year. See Section VII.,
Paperwork Reduction Act. Costs do not include incremental
reconciliation requirements of Proposal B.
---------------------------------------------------------------------------

    A further cost of allowing U.S. issuers to file IFRS financial
statements is the potential change in the level of comparability among
the reported results of U.S. issuers. This affects investors to the
extent they are seeking to compare only U.S. companies rather than
companies in the top 20 by market capitalization within a worldwide
industry. If some U.S. issuers in an industry in which IFRS is used
more than any other set of standards choose to switch from U.S. GAAP,
comparing the financial results of any remaining U.S. issuers to those
that have switched will be more costly and less precise. In eligible
industries, it is likely that not all companies will convert to IFRS
simultaneously, if at all. This may lead to enhanced comparability on
an industry-wide basis, but potential reductions in comparability for
the subset of the industry represented by U.S. firms. In addition, if
investors wish to compare companies across different industries--for
example, they may want to compare companies sharing the same inputs,
such as energy or labor--there would be either improvements or a
diminution in comparability. If one industry is eligible to convert to
IFRS, but another is not, comparability may be diminished. If IFRS is
used more frequently than any other set of accounting standards in the
top 20 companies by market capitalization in each industry to be
compared and if U.S. issuers choose to adopt IFRS, on the other hand,
comparability may be improved. In companies with multiple business
lines, switching to IFRS could potentially enhance the comparability of
some business lines, but detract from comparability of others. Any
change in comparability would potentially have the greatest impact on
less sophisticated investors. Because they are less able to compare
financial results across different bases of accounting, changes in
comparability would disproportionately affect them. In all cases, the
extent to which the comparability could be affected would in part
depend on the degree to which companies across jurisdictions
consistently apply IFRS as issued by the IASB.
    While improving the comparability of financial reporting across
entire industries is a benefit to investors, assuming the information
being compared is not of lower quality than the information produced
under the prior basis of financial reporting, a number of
considerations limit the extent of that benefit in the case of
international comparisons, relative to domestic comparisons. There are
reporting differences between U.S. registrants and non-registrants that
are unrelated to the basis for accounting. These differences include
language used in presenting financial statements, the level of
information provided in non-financial statement disclosures, and the
extent of interim disclosure. Additionally, other economic differences,
such as product markets and regulatory structures, may exist. To the
extent these differences diminish the value of international
comparisons for investors, the benefit of the proposed amendments is
correspondingly limited.
    The number of eligible U.S. issuers that elect to adopt IFRS may
influence a future decision by the Commission regarding the ongoing
role of IFRS in the U.S. capital markets. If, in the future, all U.S.
issuers were required to use U.S. GAAP in filings with the Commission,
those eligible issuers that had elected to adopt IFRS under these
proposed rules would incur costs of switching back to U.S. GAAP. These
costs could be expected to be less than the estimated costs of adoption
of IFRS, due to the existing knowledge of U.S. GAAP by accountants in
the United States and because issuers would have previous U.S. GAAP
policies and reported information available. However, if a substantial
number of issuers or percentage of total U.S. market capitalization
adopts IFRS under the proposed ``early use'' option, the costs of
requiring these issuers to return to U.S. GAAP may be large enough that
they may affect the Commission's consideration of this decision, which
would be a cost to investors. Alternatively, if the Commission chooses
to continue to allow both IFRS and U.S. GAAP use by U.S. issuers,
investors may continue to face the costs of limited comparability
across U.S. companies, as described above, in perpetuity, or at least
until convergence reduces differences between bases of accounting.
However, U.S. investors would continue to receive the benefit of
increased comparability between U.S. issuers reporting in IFRS and
their foreign counterparts reporting in IFRS. If the Commission chooses
to require mandatory IFRS reporting, transition costs to IFRS could be
similar, on a per-company basis, to transition costs described in the
PRA analysis.
    Another consideration if the Commission were to adopt the
amendments as proposed is the impact on the continued improvement of
IFRS. The Commission's intention is to enhance the incentives for the
continued improvements to IFRS and U.S. GAAP. We believe, moreover,
that the needs of the marketplace will continue to support the IASB and
the FASB working together on their next phase of joint work to develop
the best international standards to be used in the United States and
internationally. Without prejudice as to priority, the current joint
work program includes topics such as revenue recognition and financial
statement presentation. These are topics on which both the IASB and the
FASB seek to develop better standards (rather than one standard setter
adopting the other standard setter's existing U.S. GAAP or IFRS
standard). We believe that investors and issuers seek comparable
information in

global capital markets, thereby providing an incentive for continued
improvements to U.S. GAAP and IFRS. It is possible, though, that
acceptance of IFRS for U.S. issuers could reduce the incentive to
converge standards under IFRS and U.S. GAAP.
    This proposed rulemaking, if adopted, may create costs to investors
in eligible issuers that choose to continue to prepare their financial
statements under U.S. GAAP. The desire of potential investors for
comparability of financial information may create an incentive for
those that continue to use U.S. GAAP, where comparable companies have
adopted IFRS, to provide additional financial information prepared
under IFRS as issued by the IASB in addition to U.S. GAAP financial
statements. If those U.S. issuers make this choice voluntarily to
provide their investors with additional information, their investors
would bear additional preparation cost, while benefiting, along with
potential investors and regulators, from additional information
provided. U.S. issuers currently compete for capital with companies who
provide financial information prepared under IFRS. In spite of this
international competition for capital, we do not believe it is
currently a widespread practice for U.S. issuers to provide financial
information under IFRS, perhaps because U.S. GAAP is accepted by
investors in foreign markets.
    As discussed above, IFRS is not as developed as current U.S. GAAP
in certain areas. IFRS also is not as prescriptive as U.S. GAAP in
certain areas and in certain areas permits a greater amount of
allowable options than currently in U.S. GAAP.\189\ This relatively
lesser amount of guidance and greater optionality may reduce
comparability of reported financial information, as different issuers
may account or provide disclosure for similar transactions or events in
different ways. This increased level of managerial choice could affect
comparability across companies.
---------------------------------------------------------------------------

    \189\ As noted by CIFiR in its Final Report:
    From an international perspective, we note that IFRS currently
permits numerous alternative accounting policies. While we
acknowledge the IASB's efforts in reducing some of these alternative
treatments, we nonetheless believe the SEC should encourage the IASB
to [* * *] seek to eliminate alternatives as part of its standards-
setting projects.
    CIFiR Final Report, at 51.
---------------------------------------------------------------------------

B. Proposal A: Reconciled Information Pursuant to IFRS 1

    Under Proposal A, U.S. issuers adopting IFRS would only be required
to publish the reconciling information required under IFRS 1. This
information is a one-time disclosure related to transition from a prior
basis of reporting, in this case U.S. GAAP, to IFRS. This information
includes, among other things, reconciliation of the prior year's total
comprehensive income and ending equity under previous GAAP to IFRS and
certain disclosures to assist users' understanding of the effect and
implications of transitioning to IFRS. Adoption of IFRS as issued by
the IASB requires implementation of IFRS 1 and therefore Proposal A
represents the minimum reconciliation disclosure that would be required
of an eligible U.S. issuer electing to adopt IFRS under these proposed
rules. The following sections separately describe the benefits and
costs of these IFRS 1-related requirements, relative to a theoretical
benchmark in which these requirements were excluded from IFRS.
1. Expected Benefits
    The IASB noted in the basis for conclusion discussion accompanying
IFRS 1 that the required reconciliations and disclosures were necessary
to help users understand the effect and implementation of the
transition to IFRS. Further, such information is expected to assist
users in identifying changes needed to their analytical models to make
use of information presented under IFRS.
2. Expected Costs
    Both Proposal A and Proposal B require an issuer that elects to
adopt IFRS to prepare financial information under both IFRS and U.S.
GAAP for a period of time. This could be accomplished in a number of
ways, including maintaining systems for financial reporting under both
IFRS and U.S. GAAP contemporaneously or maintaining such systems under
one set of accounting standards and making adjustments to determine the
appropriate amounts and information under the other set of accounting
standards. Regardless of the approach taken, the preparation of
financial information under two sets of accounting standards would
impose costs on issuers.
    Due to the requirement to present financial statements that
generally include three years of activity, the application of IFRS 1,
as contemplated in Proposal A, would result in certain gaps in
information provided to investors about the amounts and nature of
differences between previously-reported U.S. GAAP information and IFRS
comparative information included in an issuer's first annual report
under IFRS. Specifically, a U.S. issuer would be required under IFRS 1
to reconcile equity as of the date of transition to IFRS, which is the
first day of the fiscal year for the earliest period presented.
Additionally, a U.S. issuer would be required under IFRS 1 to reconcile
the previously reported U.S. GAAP equity to IFRS equity as of the end
of the second year presented, along with a reconciliation of total
comprehensive income for that second fiscal year. However, no
reconciling information would be required for the year-end equity or
total comprehensive income related to the first year presented.
Further, under the proposed rules, an issuer would present and file
with the Commission on Form 10-Q quarterly information under U.S. GAAP
during the first year of IFRS reporting, but would report under IFRS in
its annual report on Form 10-K. IFRS 1 would not require reconciling
information for the year in which IFRS financial statements are first
presented.
    As an example, if a U.S. issuer with a December 31 fiscal year end
were to elect to report under IFRS beginning with the year ending
December 31, 2012, the financial statements included in Form 10-K would
present IFRS financial statements for 2010, 2011 and 2012.\190\ IFRS 1
would require a reconciliation of equity from U.S. GAAP to IFRS as of
January 1, 2010. Further, IFRS 1 would require a reconciliation of
ending equity and total comprehensive income for the year ending
December 31, 2011. In this example, users of the financial statements
who wish to evaluate trends for the three years presented would not
have information about the effects of IFRS adoption for the year ending
2010 nor for the year ending December 31, 2012.
---------------------------------------------------------------------------

    \190\ In addition, for purposes of this example, the Form 10-Q
filed for the first three fiscal quarters of 2012 would contain U.S.
GAAP financial statements.
---------------------------------------------------------------------------

C. Proposal B: Supplemental U.S. GAAP Information

    Under Proposal B, in addition to the reconciling information from
U.S. GAAP required under IFRS 1, U.S. issuers adopting IFRS would
annually disclose certain unaudited supplemental U.S. GAAP financial
information covering the period called for in our filings, generally
three years, including the current year. The following sections
describe benefits and costs of Proposal B as a whole, combining the
benefits and costs of IFRS 1 disclosures and the benefits and costs of
the additional, continuing reconciliation.

1. Expected Benefits
    Because IFRS 1 disclosure requirements are part of Proposals A and
B, the expected benefits of Proposal B include the expected benefits of
Proposal A. Specifically, users of financial statements would be
provided the information to help them understand the effect and
implementation of the transition to IFRS. Such disclosure is expected
to assist users in identifying changes needed to analytical models
applied to issuers' reported financial information.
    Under the additional reconciliation requirements of Proposal B,
investors benefit from the inclusion of a continuing reconciliation to
U.S. GAAP of certain items in the financial statements. Ongoing
reconciliation to U.S. GAAP of certain items allows a degree of
continued comparability between U.S. issuers adopting IFRS and other
U.S. issuers continuing to report under U.S. GAAP, and a degree of
comparability between current and past financial results of issuers
electing to adopt IFRS. Additionally, reconciliation may help to
highlight differences between U.S. GAAP and IFRS, providing useful
information for regulators and for other U.S. issuers contemplating
adoption.
    Reconciliation also reduces the costs to issuers of returning to
U.S. GAAP, should the Commission require such an action.\191\ As
previously described, such costs could affect the Commission's decision
in 2011, representing a cost to investors; by reducing these costs,
reconciliation creates a benefit for investors. On the other hand,
eligible U.S. issuers choosing to report in IFRS may be able to assess
for themselves the possibility of a return to U.S. GAAP and have an
incentive to take voluntary steps as they see appropriate to enable
reporting in U.S. GAAP should we require them to do so in the future.
---------------------------------------------------------------------------

    \191\ Absent such future rulemaking, the Commission may decide
to propose rules requiring the use of U.S. GAAP for all U.S.
issuers. Alternatively, an issuer may decide to resume reporting
under U.S. GAAP only. In such cases, associated costs would include
audit fees and internal labor costs associated with obtaining an
audit of the U.S. GAAP information for the periods during which the
issuer was reporting with the Commission under IFRS.
---------------------------------------------------------------------------

    Reductions in comparability mentioned above as costs to investors
are substantially mitigated by the inclusion of a reconciliation to
U.S. GAAP. This effect is tempered by the unaudited and selective
nature of the reconciliation.
    The benefits of the additional reconciliation requirements of
Proposal B related to comparability are mitigated by several factors.
Not all items in financial statements are reconciled; investors seeking
to compare details between IFRS and U.S. GAAP financial statements will
be less able to do so, even with a reconciliation. Because the
reconciliation would not be required to be audited, information
contained therein would not be subject to external assurances by an
independent auditor of fair presentation. To the extent that investors
benefit from such scrutiny, they may be affected. However, the
possibility that U.S. GAAP books and records will be audited in the
future, upon any potential return to reporting by the issuer under U.S.
GAAP, may help to diminish any such effect.\192\
---------------------------------------------------------------------------

    \192\ Moreover, if the reconciliation requirement addressed
these matters and thus became more costly, it cold discourage
eligible issues from switching to IFRS.
---------------------------------------------------------------------------

2. Expected Costs
    Because IFRS 1 disclosure requirements are part of Proposals A and
B, the expected costs of Proposal B include certain expected costs of
Proposal A. Specifically, the costs related to the preparation of
financial information under both IFRS and U.S. GAAP for a period of
time would be imposed under either proposal. However, certain expected
costs under Proposal A relate to the absence of certain reconciliation
disclosures to assist users of financial information to understand the
impact of reporting under IFRS rather than U.S. GAAP. Thus, the
expected costs under Proposal A associated with providing users with
less information would not be imposed under Proposal B.
    Because Proposal B would require continued reconciliation between
certain U.S. GAAP and IFRS information, the expected costs of preparing
information under two sets of accounting standards would be greater
under Proposal B. The additional requirements of Proposal B to provide
a continuing reconciliation of certain items to U.S. GAAP increase
reporting costs and, potentially, record-keeping costs for issuers,
which may be passed through to their investors. Based on the data used
for purposes of the Paperwork Reduction Act, we currently estimate the
costs at this time to be approximately $2.7 million per adopting
company over three years, or an aggregate of approximately $297 million
over three years, for the approximately 110 issuers estimated to be the
approximate minimum eligible under the proposed amendments.\193\ These
cost estimates assume an annual, recurring cost of $900,000 per company
and reflect an assumption that issuers will choose to keep two sets of
books and records as a result of the proposed reconciliation
requirement.\194\ The degree to which ongoing reconciliation imposes an
incremental cost depends on the manner in which a company would
implement adoption in the absence of an ongoing reconciliation
requirement. Under the proposed rule, companies adopting IFRS may keep
two parallel sets of books and records, one in U.S. GAAP and one in
IFRS, for a period of time, whether or not an ongoing reconciliation is
required. Keeping parallel books and records would help a company to
ensure a smooth transition between accounting systems and would allow
flexibility to return to U.S. GAAP reporting, were such an action
necessary. If such a practice is the norm, we expect that the costs of
required ongoing reconciliation would be small, as U.S. GAAP results
would be readily available. Alternatively, some companies adopting
IFRS, in the absence of the requirements in Proposal B, may elect to
switch to IFRS without keeping two sets of books and records. If
companies follow this practice, then the incremental costs of a
required ongoing reconciliation would be larger. In either case, some
companies may continue to provide ongoing U.S. GAAP information
voluntarily, in the absence of a requirement, based on market demand.
Shareholder efforts to require consistent and high-quality disclosure
can be considered a public good, which is expected to be underprovided
in the absence of regulation. Addressing this underprovision of
monitoring efforts through disclosure is one of the key purposes of
regulatory disclosure requirements. In this case, the incremental costs
of required ongoing reconciliation for these companies would be small.
We are aware of very few companies that publish financial results in
accordance with more than one set of accounting standards absent a
requirement to do so.
---------------------------------------------------------------------------

    \193\ These estimated amounts are based on an estimated annual
recurring cost of $900,000 per eligible issuer, over a three year
period and assuming that all 110 of the approximate minimum
estimated eligible issuers would adopt IFRS and be subject to the
annual reconciliation requirement.
    \194\ See Section VII., Paperwork Reduction Act.
---------------------------------------------------------------------------

    As noted, if some U.S. issuers elect to adopt IFRS, regulators and
investors benefit from enhanced information about the use of IFRS in
U.S. markets, information useful for investment and regulatory decision
making. This benefit may be mitigated if, under Proposal B, some
companies would be less likely to adopt IFRS. Proposal B could have two
potential effects affecting likelihood of

an eligible issuer adopting IFRS. First, a reconciliation requirement
involves some costs to the issuer, discussed in the previous paragraph;
any increase in adoption costs likely reduces issuers' willingness to
adopt IFRS. Second, as discussed in the benefits section of Proposal B,
a reconciliation reduces the costs of requiring a return to U.S. GAAP.
These lowered costs may result in issuers believing that the Commission
will decide in 2011 not to require IFRS, and issuers may also then
believe that there is a chance of a required return to U.S. GAAP. This
would lower their net benefits from early adoption, and they may elect
not to adopt IFRS.
Request for Comment
    67. Do you agree with our assessment of the costs and benefits as
discussed in this section? Are there costs or benefits that we have not
considered? Are you aware of data and/or estimation techniques for
attempting to quantify these costs and/or benefits? If so, what are
they and how might the information be obtained?

IX. Regulatory Flexibility Act Certification

    The Commission hereby certifies pursuant to 5 U.S.C. 605(b), that
the amendments contained in this release, if adopted, would not have a
significant economic impact on a substantial number of small entities.
The proposal would amend those regulations, rules and forms to allow
eligible U.S. issuers to use as their basis of financial reporting IFRS
as issued by the IASB and to file their financial statements prepared
in that manner. The Commission is not proposing that filing in this
manner be required, therefore if these amendments were adopted small
entities need not take any action. We propose to exclude smaller
reporting companies from the proposed definition of ``IFRS issuer'' as
a limitation on the number of issuers that would be eligible to file
IFRS financial statements under the proposed rules. In addition, we
believe that few small entities would meet the eligibility test under
the proposed rules, which would permit an issuer to use IFRS only if it
is in the largest 20 companies in its industry worldwide as measured by
market capitalization. For these reasons, the proposed amendments
should not have a significant economic impact on a substantial number
of small entities. Additionally, in the event that we decide in 2011 to
mandate the use of IFRS for all U.S. issuers, any disparate impact on
small entities caused by the proposed amendments in this release would
be temporary. We solicit written comments regarding this certification.
We request that commenters describe the nature of any impact on small
entities and provide empirical data to support the extent of the
impact.

X. Consideration of Impact on the Economy, Burden on Competition and
Promotion of Efficiency, Competition and Capital Formation

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996, or ``SBREFA,'' \195\ we solicit data to determine whether
the proposals constitute a ``major'' rule. Under SBREFA, a rule is
considered ``major'' where, if adopted, it results or is likely to
result in:
---------------------------------------------------------------------------

    \195\ 5 U.S.C. 603.
---------------------------------------------------------------------------

     An annual effect on the economy of $100 million or more
(either in the form of an increase or a decrease);
     A major increase in costs or prices for consumers or
individual industries; or
     Significant adverse effects on competition, investment or
innovation.
    We request comment on the potential impact of the proposals on the
economy on an annual basis. Commenters are requested to provide
empirical data and other factual support for their views if possible.
    Section 23(a)(2) of the Exchange Act \196\ also requires us, when
adopting rules under the Exchange Act, to consider the impact that any
new rule would have on competition. Section 23(a)(2) prohibits us from
adopting any rule that would impose a burden on competition not
necessary or appropriate in furtherance of the purposes of the Exchange
Act. In addition, Section 2(b) \197\ of the Securities Act and Section
3(f) \198\ of the Exchange Act require us, when engaging in rulemaking
where we are required to consider or determine whether an action is
necessary or appropriate in the public interest, to also consider
whether the action will promote efficiency, competition, and capital
formation.
---------------------------------------------------------------------------

    \196\ 15 U.S.C. 78w(a).
    \197\ 15 U.S.C. 77b(b).
    \198\ U.S.C. 78c(f).
---------------------------------------------------------------------------

    The proposed amendments would allow eligible U.S. issuers to use
IFRS rather than U.S. GAAP to prepare their financial statements in
filings with the Commission. This proposal is designed to increase
efficiency, competition and capital formation by helping to move
towards the use of a single set of globally accepted accounting
standards. The use of a single set of accounting standards could help
investors better understand investment opportunities than the use of
differing sets of accounting standards. In addition, presenting
investors with financial information that varies substantially
depending on which set of accounting standards is employed can cause
confusion about the actual financial results of a company and result in
a correspondingly adverse effect on investor confidence and cost of
capital.
    The proposals are intended to increase efficiency by enabling
investors to better compare financial statements of U.S. issuers that
adopt IFRS with those of non-U.S. issuers operating in the same
industry. Issuers with subsidiaries that already use IFRS also may be
able to streamline their accounting systems and increase their
efficiency if they adopt IFRS across all of their operations. We also
are aware that the proposed amendments would permit some U.S. issuers
to use IFRS financial statements while other U.S. issuers continue to
use U.S. GAAP, thereby creating a dual system of financial reporting
that has not existed previously for U.S. public companies. This could
reduce the comparability among U.S. issuers and would require investor
familiarity with both sets of accounting standards, which may adversely
affect efficiency. However, we anticipate any such dual system may be
transitional and not permanent.
    The proposed amendments are designed to promote competition by
enhancing the ability of eligible U.S. issuers that adopt IFRS to
compete with non-U.S. issuers that use IFRS. The proposed rules would
not enhance the competitiveness of U.S. issuers that would not be
eligible to adopt IFRS but that compete with issuers that do use IFRS.
    The proposed amendments may facilitate capital formation for
eligible U.S. issuers that adopt IFRS by allowing them greater access
to global capital raising opportunities. As more jurisdictions accept
financial statements prepared in accordance with IFRS for local
regulatory or statutory filing purposes, companies accessing global
capital markets would not incur any additional costs to translate
financial statements using different accounting standards to IFRS.
However, U.S. issuers that would not be eligible to use IFRS under the
proposed amendments may be for a time at a comparative disadvantage in
this regard.
    It is possible that the amendments would not confer comparative
advantages on those eligible issuers who transition to IFRS versus the
companies that continue using U.S. GAAP. In addition, the amendments
could have a negative impact on capital formation if IFRS does not gain
acceptance by U.S.

investors. We solicit public comment that will assist us in assessing
the impact that the proposed amendments could have on competition,
efficiency and capital formation.
Request for Comment
    68. We solicit comment on whether the proposed rules would impose a
burden on competition or whether they would promote efficiency,
competition and capital formation. For example, would the proposals
have an adverse effect on competition that is neither necessary nor
appropriate in furtherance of the purposes of the Exchange Act?
    69. Would the proposals create an adverse competitive effect on
U.S. issuers that are not in a position to rely on the alternative or
on foreign private issuers that do not report in IFRS?
    70. Would the proposed amendments, if adopted, promote efficiency,
competition and capital formation?
    Commenters are requested to provide empirical data and other
factual support for their views if possible.

XI. Proposed Amendments to the Codification of Financial Reporting
Policies

    We propose to update the ``Codification of Financial Reporting
Policies'' announced in Financial Reporting Release 1 (April 15, 1982)
[47 FR 21028] as follows:
    By adding at the end of Section 101, under the Financial Reporting
Number (FR-XX) assigned to this release, the text of Sections I through
III of this release.
    The Codification is a separate publication of the Commission. It
will not be published in the Code of Federal Regulations System.

XII. Statutory Basis and Text of Proposed Amendments

    We are proposing amendments to Rules 1-01, 1-02, 3-10, 4-01, 8-01
and Article 13 of Regulation S-X; Items 10, 101, 301, 504, 1100, 1112,
1114 and 1115 of Regulation S-K and Rule 405 of Regulation C under the
Securities Act; and Rule 12b-2 of Regulation 12B, Schedule 13E-3,
Schedule TO, Rule 101(b) of Regulation G and Form 8-K under the
Exchange Act; pursuant to Sections 6, 7, 10, and 19 of the Securities
Act, Sections 3, 12, 13, 15, 23 and 36 of the Exchange Act , and
Sections 3(c)(2) and 108(c) of the Sarbanes Oxley Act of 2002.

Text of Amendments

List of Subjects in 17 CFR Parts 210, 229, 230, 240, 244 and 249

    Reporting and recordkeeping requirements, Securities.

    In accordance with the foregoing, Title 17, Chapter II of the Code
of Federal Regulations is proposed to be amended as follows:

PART 210--FORM AND CONTENT OF AND REQUIREMENTS FOR FINANCIAL
STATEMENTS, SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF
1934, PUBLIC UTILITY HOLDING COMPANY ACT OF 1935, INVESTMENT
COMPANY ACT OF 1940, INVESTMENT ADVISORS ACT OF 1940, AND ENERGY
POLICY AND CONSERVATION ACT OF 1975

    1. The authority citation for Part 210 continues to read as
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3,
77aa(25), 77aa(26), 78c, 78j-1, 78l, 78m, 78n, 78o(d), 78q, 78u-5,
78w(a), 78ll, 78mm, 80a-8, 80a-20, 80a-29, 80a-30, 80a-31, 80a-
37(a), 80b-3, 80b-11, 7202, and 7262, unless otherwise noted.

    2. Section 210.1-01 is amended by adding a sentence at the end of
paragraph (c) to read as follows:

Sec.  210.1-01  Application of Regulation S-X (17 CFR part 210).

* * * * *
    (c) * * * In this regard, the application of Sec.  210.4-10 in
Article 13 of this Part only applies to filings pursuant to the federal
securities laws.
    3. Section 210.1-02 is amended by
    a. Revising the last sentence to the ``Note to paragraph (w),'' and
    b. Adding paragraph (cc).
    The revision and addition read as follows:

Sec.  210.1-02  Definitions of terms used in Regulation S-X (17 CFR
part 210).

* * * * *
    (w) * * *

    Note to paragraph (w): * * * An IFRS issuer or a foreign private
issuer that files its financial statements in accordance with
International Financial Reporting Standards (``IFRS'') as issued by
the International Accounting Standards Board (``IASB'') shall make
the prescribed tests using amounts determined under IFRS as issued
by the IASB.

* * * * *
    (cc) IFRS issuer. The term IFRS issuer means any issuer, other than
a foreign private issuer that files financial statements pursuant to
Item 17 or Item 18 of Form 20-F (Sec.  249.220f of this chapter), that
meets the following criteria and files its financial statements in
accordance with IFRS as issued by the IASB pursuant to Rule 4-01(a)(3)
and Article 13 of Regulation S-X (Sec. Sec.  210.4-01(a)(3) and
210.13):
    (1) The issuer is not an investment company, an employee stock
purchase, savings and similar plan, or a smaller reporting company;
    (2) The issuer has requested and received a letter from the staff
of the Commission expressing no objection that the issuer is eligible
to file with the Commission financial statements prepared in accordance
with IFRS as issued by the IASB;
    (3) The issuer makes its first filing preparing its required
financial statements in accordance with IFRS as issued by the IASB
within 3 years following issuance of the most recently dated letter
from the staff of the Commission described in paragraph (cc)(2) of this
section; and
    (4) The issuer's incoming request to the staff of the Commission
pursuant to paragraph (cc)(2) of this section must be sent to the
attention of the Division of Corporation Finance--Office of the Chief
Accountant and demonstrate the following:
    (i) The issuer is in an industry in which IFRS as issued by the
IASB is used as the basis of financial reporting more than any other
basis of financial reporting by the 20 largest listed companies
worldwide by market capitalization within that industry; and
    (ii) The issuer is one of the 20 largest listed companies worldwide
by market capitalization within that industry as of a date within 180
days prior to the request.

    Note 1 to paragraph (cc): An issuer, in determining its industry
and the top 20 largest listed companies worldwide by market
capitalization within that industry, must use one of the following
classification schemes: The North American Industry Classification
System (NAICS) codes at the three-digit level, the Standard
Industrial Classification (SIC) codes at the two-digit level, or the
International Standard Industrial Classification (ISIC) codes at the
``Division'' level. In the alternative, an issuer could use a
private industry classification scheme provided that such
classification scheme is published and is widely accepted as an
industry classification scheme, such as, for example, the Industry
Classification Benchmark (ICB) at the ``Sector'' level or the Global
Industry Classification Standard (GICS) at the ``Industry'' level.
For classifications of individual companies, the issuer must use a
single published and widely accepted industry source. The provider
of the classification scheme may be the same entity as the source of
classifications of individual companies.

    Note 2 to paragraph (cc): Market capitalization for purposes of
this section means aggregate worldwide market value of voting and
non-voting common equity. Market capitalization must be determined
from a widely accepted source as of the same day within 180 days
prior to the request.

    Note 3 to paragraph (cc): The basis of financial reporting is to
be determined based

on a specified set of accounting principles. Companies in an
industry are considered to report under a specified set of
accounting principles if they have published audited financial
statements under those accounting principles. Companies reporting
under more than one set of accounting principles can be counted as
using any of those sets of accounting principles. In determining its
eligibility to use IFRS as issued by the IASB, an issuer must
undertake reasonable efforts to determine the set of accounting
standards used by the twenty largest companies in its industry
group. To the extent an issuer's analysis includes companies whose
financial statements are prepared under a jurisdictional version of
IFRS or as to which it is not clear whether the financial statements
are prepared under IFRS as issued by the IASB, the issuer should
state that no information came to its attention from the content of
the financial statements of the companies analyzed or otherwise that
causes it to believe that the financial statements are not in
accordance with IFRS as issued by the IASB.

Sec.  210.3-10  [Amended]

    4. Section 210.3-10, paragraph (g)(2)(ii), is amended by revising
the reference ``(Sec. Sec.  210.1-01 through 12-29)'' to read
``(Sec. Sec.  210.1-01 through 210.13-03).''
    5. Section 210.4-01 is amended by:
    a. Redesignating paragraph (a)(3) as paragraph (a)(5), and
    b. Adding new paragraphs (a)(3), (a)(4) and (d).
    The addition reads as follows.

Sec.  210.4-01  Form, order and terminology.

    (a) * * *
    (3) In filings of IFRS issuers defined in Sec.  210.1-02(cc)
financial statements may be prepared according to International
Financial Reporting Standards (``IFRS'') as issued by the International
Accounting Standards Board (``IASB'').
    (4) With respect to financial statements required by Rule 3-05, 3-
09 or 3-14 of Regulation S-X (Sec. Sec.  210.3-05, 210.3-09 or 210.3-
14) in the filings of IFRS issuers or foreign private issuers, the
financial statements may be prepared in accordance with IFRS as issued
by the IASB.
* * * * *
    (d) Financial statements prepared in accordance with IFRS as issued
by the IASB are subject to Article 13 (Sec. Sec.  210.13-01 through
210.13-03).

Sec.  210.8-01  [Amended]

    6. Section 210.8-01, in Note 6 to Sec.  210.8, is amended by
revising the reference ``Section 210.4-01(a)(3)'' to read ``Section
210.4-01(a)(5)''.
    7. Add an undesignated center heading following Sec.  210.12-29 and
Sec. Sec.  210.13-01, 210.13-02 and 210.13-03 to read as follows:

Article 13--Use of International Financial Reporting Standards

Sec.
210.13-01 Application of Article 13.
210.13-02 Application of Regulation S-X.
210.13-03 Application of references.

Article 13--Use of International Financial Reporting Standards

Sec.  210.13-01  Application of Article 13.

    (a) This article shall be applicable to financial statements that
are to be prepared in accordance with International Financial Reporting
Standards (``IFRS'') as issued by the International Accounting
Standards Board (``IASB'') filed:
    (1) By an IFRS issuer as defined in Sec.  210.1-02(cc);
    (2) By a foreign private issuer pursuant to Item 17 or Item 18 of
Form 20-F (Sec.  249.220f of this chapter); or
    (3) Pursuant to Rule 3-05, 3-09 or 3-14 of Regulation S-X (Sec.
210.3-05, 210.3-09 or 210.3-14), where applicable.
    (b) With respect to the financial statements described in paragraph
(a) of this section:
    (1) Such financial statements must contain an appropriately
captioned note in which the issuer unreservedly and explicitly states
compliance with IFRS as issued by the IASB;
    (2) The applicable accountant's report must include an opinion on
whether the financial statements comply with IFRS as issued by the
IASB; and
    (3) Financial statements which are not prepared in accordance with
IFRS as issued by the IASB will be presumed to be misleading or
inaccurate, despite footnote or other disclosures, unless the
Commission has otherwise provided.
    (c) Transition provisions for IFRS issuers. An IFRS issuer changing
from U.S. GAAP to IFRS as issued by the IASB may only begin reporting
using IFRS as issued by the IASB in an annual report on Form 10-K
(Sec.  249.310 of this chapter). Similarly, an IFRS issuer changing
from IFRS as issued by the IASB to U.S. GAAP may only begin reporting
using U.S. GAAP in an annual report on Form 10-K.

Sec.  210.13-02  Application of Regulation S-X.

    Unless a specific provision of Regulation S-X does not otherwise
apply, the provisions of Article 1 through Article 12 of Regulation S-X
shall apply to financial statements described in Sec.  210.13-01(a) as
follows:
    (a) Article 1 ``Application of Regulation S-X'' shall apply;
    (b) Article 2 ``Qualifications and Reports of Accountants'' shall
apply;
    (c) Article 3 ``General Instructions as to Financial Statements''
shall apply, except for:
    (1) Section 210.3-03 which need not apply;
    (2) Section 210.3-04, which need not apply;
    (3) Section 210.3-15(a), which shall not apply;
    (4) Section 210.3-15(b) and (c), which need not apply; and
    (5) Section 210.3-20, which shall not apply to an IFRS issuer.
    (d) Article 3A ``Consolidated and Combined Financial Statements''
need not apply.
    (e) Article 4 ``Rules of General Application'' shall apply, except
for:
    (1) Section 210.4-07, which need not apply;
    (2) Section 210.4-08, which need not apply; and
    (3) The following paragraphs of Sec.  210.4-10:
    (i) Paragraph (b) of this section, which need not apply;
    (ii) Paragraph (c) of this section, which need not apply; and
    (iii) Paragraph (d) of this section, which need not apply.
    (f) Article 5 ``Commercial and Industrial Companies'' need not
apply, except for Sec.  210.5-04, which shall apply.
    (g) Article 6 ``Registered Investment Companies'' shall not apply.
    (h) Article 6A ``Employee Stock Purchase, Savings and Similar
Plans'' shall not apply.
    (i) Article 7 ``Insurance Companies'' need not apply, except for
Sec.  210.7-05, which shall apply.
    (j) Article 8 ``Financial Statements of Smaller Reporting
Companies'' shall not apply.
    (k) Article 9 ``Bank Holding Companies'' need not apply, except for
Sec.  210.9-06, which shall apply.
    (l) Article 10 ``Interim Financial Statements'' need not apply,
except for the following, which shall apply:
    (1) Sections 210.10-01(a)(1) and (a)(6);
    (2) Section 210.10-01(b)(6);
    (3) Sections 210.10-01(c)(1) through (c)(3);
    (4) Section 210.10-01(d); and
    (5) Section 210.10-01(e).
    (m) Article 11 ``Pro Forma Financial Information'' shall apply.
    (n) Article 12 ``Form and Content of Schedules'' shall apply.

Sec.  210.13-03  Application of references.

    (a) Unless otherwise specifically provided, references in Parts
210, 229, 230, 239, 240 (other than Sec. Sec.  240.11a1-h, 240.15c3-1g,
240.17a-5, 240.17g-3, 240.17h-1T, and 240.17i-6 of this

chapter) and 249 to ``generally accepted accounting principles,''
should be construed solely for purposes of application of the relevant
requirement to mean IFRS as issued by the IASB.
    (b) Unless otherwise specifically provided, in providing
information in response to requirements in Parts 210, 229, 230, 239,
240 and 249 that refer to specific pronouncements of U.S. GAAP,
disclosure is to be provided that satisfies the objective of the
relevant disclosure requirements.
    (c) In providing general caption data, segment data or schedule
information in response to Regulation S-K item requirements (Sec. Sec.
229.10 through 229.915 of this chapter), amounts may be presented based
on IFRS as issued by the IASB. In providing schedules pursuant to Sec.
210.5-04 or 210.7-05, an IFRS issuer or foreign private issuer that
prepares financial statements in accordance with IFRS as issued by the
IASB may present amounts based on IFRS as issued by the IASB. Financial
information presented pursuant to Sec.  210-9.06 may be presented as a
separate audited schedule and may use amounts based on IFRS as issued
by the IASB.
    (d) An issuer or entity that is required to provide disclosure
under FASB Statement of Accounting Standards No. 69, ``Disclosure about
Oil and Gas Producing Activities,'' shall do so regardless of whether
its financial statements are prepared in accordance with IFRS as issued
by the IASB.

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K

    8. The authority citation for part 229 continues to read in part as
follows:

    Authority: 15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 777iii,
77jjj, 77nnn, 77sss, 78c, 78i, 78j, 78l, 78m, 78n, 78o, 78u-5, 78w,
78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c), 80a-37,
80a-38(a), 80a-39, 80b-11, and 7201 et seq.; and 18 U.S.C. 1350,
unless otherwise noted.
* * * * *
    9. Section 229.10 is amended by revising paragraphs (e)(3)(i) and
(ii) to read as follows:

Sec.  229.10  (Item 10) General.

* * * * *
    (e) * * *
    (3) * * *
    (i) In the case of foreign private issuers or IFRS issuers whose
primary financial statements are prepared in accordance with non-U.S.
generally accepted accounting principles, GAAP refers to the principles
under which those primary financial statements are prepared; and
    (ii) In the case of foreign private issuers or IFRS issuers that
include a non-GAAP financial measure derived from a measure calculated
in accordance with U.S. generally accepted accounting principles, GAAP
refers to U.S. generally accepted accounting principles for purposes of
the application of the requirements of this paragraph (e) to the
disclosure of that measure.
* * * * *
    10. Section 229.101 is amended by adding paragraphs (i) and (j)
before the Instructions to Item 101 to read as follows:

Sec.  229.101  (Item 101) Description of business.

* * * * *
    (i) Change in comprehensive set of accounting principles. An issuer
that has elected to change the comprehensive set of accounting
principles used in preparing its primary financial statements to
International Financial Reporting Standards [bs]
(``IFRS'') as issued by the International Accounting Standards Board
(``IASB''), or to U.S. GAAP from IFRS as issued by the IASB, for
purposes of its filings with the Commission shall prominently disclose
the following in its first annual report on Form 10-K (Sec.  249.310 of
this chapter) that contains financial statements prepared using such
comprehensive set of accounting principles:
    (1) The new comprehensive set of accounting principles used to
prepare the financial statements;
    (2) The reasons for which the issuer elected to make the change;
    (3) The corporate governance processes followed in electing to make
the change, including, for example, whether a shareholder vote was held
and the extent to which the issuer's board of directors and audit
committee considered the matter; and
    (4) With respect to an election to IFRS as issued by the IASB, the
date the issuer made its request to the staff of the Commission
demonstrating that the issuer met the criteria in Rule 1-02(cc) of
Regulation S-X (Sec.  210.1-02(cc) of this chapter) for being an ``IFRS
issuer,'' and the date the staff of the Commission issued its letter of
no objection to such request.
    (j) Supplemental U.S. GAAP information. An issuer that prepares its
primary financial statements included in an annual report on Form 10-K
(Sec.  249.310 of this chapter) in accordance with IFRS as issued by
the IASB, pursuant to Article 13 of Regulation S-X (Sec. Sec.  210.13-
01 through 210.13-03 of this chapter) shall provide in the annual
report a reconciliation of financial information from IFRS as issued by
the IASB to U.S. generally accepted accounting principles. The
reconciliation shall give sufficient details to enable users to
understand the material adjustments to the primary financial statements
presented in accordance with IFRS as issued by the IASB that would be
necessary were the primary financial statements presented in accordance
with U.S. generally accepted accounting principles.
* * * * *
    11. Section 229.301 is amended adding Instruction 8 to the
Instructions to Item 301 to read as follows:

Sec.  229.301  (Item 301) Selected financial data.

* * * * *
    Instructions to Item 301:
* * * * *
    8. IFRS issuers shall present the selected financial data on the
basis of IFRS as issued by the IASB. An IFRS issuer that prepares its
primary financial statements in accordance with IFRS as issued by the
IASB for the first time may provide selected financial data based on
IFRS as issued by the IASB for the three most recent years.

Sec.  229.504  [Amended]

    12. Instruction 6 to Sec.  229.504 is amended by revising the
reference ``(17 CFR 210.1-01 through 210.12-29)'' to read ``(17 CFR
210.1-01 through 210.13-03)''.
    13. Section 229.1100(c)(2)(ii)(F), Sec.  229.1112(b)(2), first
sentence, Sec.  229. 1114(b)(2)(ii), first sentence, and Sec.
229.1115(b)(2), first sentence, are amended by revising the reference
``(Sec. Sec.  210.1-01 through 210.12-29 of this chapter)'' to read
``(Sec. Sec.  210.1-01 through 210.13.03 of this chapter)''.

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

    14. The authority citation for Part 230 continues to read in part
as follows:

    Authority: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r,
77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78t, 78w,
78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37,
unless otherwise noted.
* * * * *
    15. Amend Sec.  230.405 to add the definition of ``IFRS issuer'' in
alphabetical order to read as follows.

Sec.  230.405  Definition of terms.

* * * * *
    IFRS issuer. The term IFRS issuer means any issuer that meets the
definition of ``IFRS issuer'' contained in Rule 1-02 of Regulation S-X
(Sec.  210.1-02 of this chapter).
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

    16. The authority citation for Part 240 continues to read in part
as follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i,
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5,
78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4,
80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise
noted.
* * * * *
    17. Amend Sec.  240.12b-2 to add the definition ``IFRS issuer'' in
alphabetical order to read as follows:

Sec.  240.12b-2  Definitions.

* * * * *
    IFRS issuer. The term IFRS issuer means any issuer that meets the
definition of ``IFRS issuer'' contained in Rule 1-02 of Regulation S-X
(Sec.  210.1-02 of this chapter).
* * * * *
    18. Amend Sec.  240.13e-100, Instructions to Item 13, by revising
the last sentence of Instruction 1 and revising Instruction 2 to read
as follows:

Sec.  240.13e-100  Schedule 13E-3, Transaction statement under section
13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 (Sec.
240.13e-3) thereunder.

* * * * *
    Instructions to Item 13:
    1. * * * If the summarized financial information is prepared on the
basis of a comprehensive body of accounting principles other than
either U.S. GAAP, or International Financial Reporting Standards
(``IFRS'') as issued by the International Accounting Standards Board
(``IASB'') if filed by a foreign private issuer or an IFRS issuer as
defined in Rule 1-02(cc) of Regulation S-X (Sec.  210.1-02(cc) of this
chapter), the summarized financial information must be accompanied by a
reconciliation as described in Instruction 2 of this Item.
    2. If the financial statements required by this Item are prepared
on the basis of a comprehensive body of accounting principles other
than U.S. GAAP, or IFRS as issued by the IASB if filed by a foreign
private issuer or an IFRS issuer, provide a reconciliation to U.S. GAAP
in accordance with Item 17 of Form 20-F (Sec.  249.220f of this
chapter).
* * * * *
    19. Amend Sec.  240.14d-100, Instructions to Item 10, by revising
the last sentence of Instruction 6 and revising Instruction 8 to read
as follows:

Sec.  240.14d-100  Schedule TO. Tender offer statement under section
14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934.

* * * * *
    Instructions to Item 10:
* * * * *
    6. * * * If the summarized financial information is prepared on the
basis of a comprehensive body of accounting principles other than
either U.S. GAAP, or International Financial Reporting Standards
(``IFRS'') as issued by the International Accounting Standards Board
(``IASB'') if filed by a foreign private issuer or an IFRS issuer as
defined in Rule 1-02(cc) of Regulation S-X (Sec.  210.1-02(cc) of this
chapter), the summarized financial information must be accompanied by a
reconciliation as described in Instruction 8 of this Item.
* * * * *
    8. If the financial statements required by this Item are prepared
on the basis of a comprehensive body of accounting principles other
than either U.S. GAAP, or IFRS as issued by the IASB if filed by a
foreign private issuer or an IFRS issuer, provide a reconciliation to
U.S. GAAP in accordance with Item 17 of Form 20-F (Sec.  249.220f of
this chapter), unless a reconciliation is unavailable or not obtainable
without unreasonable cost or expense. At a minimum, however, when
financial statements are prepared on a basis other than U.S. GAAP, or
IFRS as issued by the IASB if filed by a foreign private issuer or an
IFRS issuer, a narrative description of all material variations in
accounting principles, practices and methods used in preparing the non-
U.S. GAAP financial statements from those accepted in the U.S. must be
presented.
* * * * *

PART 244--REGULATION G

    20. The authority citation for part 244 continues to read as
follows:

    Authority: 15 U.S.C. 7261, 78c, 78i, 78j, 78m, 78o, 78w, 78mm,
and 80a-29.

    21. Amend Sec.  244.101 by revising paragraphs (b)(1) and (b)(2) to
read as follows:

Sec.  244.101  Definitions.

* * * * *
    (b) * * *
    (1) In the case of foreign private issuers or IFRS issuers whose
primary financial statements are prepared in accordance with non-U.S.
generally accepted accounting principles, GAAP refers to the principles
under which those primary financial statements are prepared; and
    (2) In the case of foreign private issuers or IFRS issuers that
include a non-GAAP financial measure derived from a measure calculated
in accordance with U.S. generally accepted accounting principles, GAAP
refers to U.S. generally accepted accounting principles for purposes of
the application of the requirements of Regulation G to the disclosure
of that measure.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

    22. The authority citation for part 249 continues to read in part
as follows:

    Authority: 15 U.S.C. 78a et seq., and 7201 et seq.; and 18
U.S.C. 1350, unless otherwise noted.
* * * * *
    23. Amend Form 8-K (referenced in Sec.  249.308) as follows:
    a. In Item 2.04, add a sentence at the end of Instruction 4;
    b. In Item 2.05, add an Instruction following paragraph (d); and
    c. In Item 4.02, add an Instruction following paragraph (c)(3).
    The additions and revisions read as follows.

    Note: The text of Form 8-K does not and this amendment will not
appear in the Code of Federal Regulations.

FORM 8-K

* * * * *

Item 2.04  Triggering Events That Accelerate or Increase a Direct
Financial Obligation or an Obligation Under an Off-Balance Sheet
Arrangement.

* * * * *
    Instructions.
* * * * *
    4. * * * When providing disclosure in response to provisions of
this Item that refer to SFAS No. 5, an IFRS issuer should refer instead
to IAS 37 ``Provisions, Contingent Liabilities and Contingent Assets,''
as may be modified, supplemented or succeeded.
* * * * *

Item 2.05  Costs Associated with Exit or Disposal Activities.

* * * * *
    (d) * * *
    Instruction.
    When providing disclosure in response to provisions of this Item
that refer to SFAS No. 146, an IFRS issuer

should refer instead to IFRS 5 ``Non-current Assets Held for Sale and
Discontinued Operations,'' as may be modified, supplemented or
succeeded.
* * * * *

Item 4.02  Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review.

* * * * *
    (c) * * *
    (3) * * *
    Instruction.
    When providing disclosure in response to provisions of this Item
that refer to Accounting Principles Board Opinion No. 20, as may be
modified, supplemented or succeeded, an IFRS issuer should refer
instead to IAS 8 ``Accounting Policies, Changes in Accounting Estimates
and Errors,'' as may be modified, supplemented or succeeded.
* * * * *

    By the Commission.

    Dated: November 14, 2008.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-27559 Filed 11-20-08; 8:45 am]

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[Federal Register Volume 79, Number 9 (Tuesday, January 14, 2014)]
[Notices]
[Pages 2452-2453]
[FR Doc No: 2014-00475]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2013-N-0001]

Pediatric Advisory Committee; Notice of Meeting

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

    This notice announces a forthcoming meeting of a public advisory
committee of the Food and Drug Administration (FDA). The meeting will
be open to the public.
    Name of Committee: Pediatric Advisory Committee.
    General Function of the Committee: To provide advice and
recommendations to the Agency on FDA's regulatory issues.
    Date and Time: The meeting will be held on March 3, 2014, from 8
a.m. to 4:30 p.m.
    Location: Bethesda Marriott, 5151 Pooks Hill Road, Bethesda, MD
20814,<PHONE_NUMBER>, or visit the hotel's Web site at http://www.marriott.com/hotels/travel/wasbt-bethesda-marriott/.
    Contact Person: Walter Ellenberg, Office of the Commissioner, Food
and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 5154,
Silver Spring, MD 20993-0002,<PHONE_NUMBER>, email
<EMAIL_ADDRESS>or FDA Advisory Committee Information
Line, 1-800-741-8138<PHONE_NUMBER> in the Washington, DC area). A
notice in the Federal Register about last minute modifications that
impact a previously announced advisory committee meeting cannot always
be published quickly enough to provide timely notice. Therefore, you
should always check the Agency's Web site at http://www.fda.gov/AdvisoryCommittees/default.htm and scroll down to the appropriate
advisory committee meeting link, or call the advisory committee
information line to learn about possible modifications before coming to
the meeting.
    Agenda: On March 3, 2014, the Pediatric Advisory Committee (PAC)
will meet to discuss pediatric focused safety reviews, as mandated by
the Best Pharmaceuticals for Children Act (Pub. L. 107-109) and the
Pediatric Research Equity Act (Pub. L. 108-155). The PAC will meet to
discuss ACTIVA Dystonia Therapy, ADVATE [Antihemophilic Factor
(Recombinant)], FAMVIR (famciclovir), INTELENCE (etravirine), KEPPRA
(levetiracetam), MAXALT and MAXALT MLT (rizatriptan), NATAZIA

(estradiol valerate and estradiol valerate/dienogest), PERTZYE
(pancrelipase), PREZISTA (darunavir), REYATAZ (atazanavir), SKLICE
(ivermectin), TISSEEL (Fibrin Sealant), TORISEL (temsirolimus), ULTRESA
(pancrelipase), Vertical Expandable Prosthetic Titanium Rib (VEPTR),
VIREAD (tenofovir disoproxil fumarate).
    FDA intends to make background material available to the public no
later than 2 business days before the meeting. If FDA is unable to post
the background material on its Web site prior to the meeting, the
background material will be made publicly available at the location of
the advisory committee meeting, and the background material will be
posted on FDA's Web site after the meeting. Background material is
available at http://www.fda.gov/AdvisoryCommittees/Calendar/default.htm. Scroll down to the appropriate advisory committee link.
    Procedure: Interested persons may present data, information, or
views, orally or in writing, on issues pending before the committee.
Written submissions may be made to the contact person on or before
February 24, 2014. Oral presentations from the public will be scheduled
on March 3, 2014, between approximately 11:30 a.m. and 12:30 p.m. Those
individuals interested in making formal oral presentations should
notify the contact person and submit a brief statement of the general
nature of the evidence or arguments they wish to present, the names and
addresses of proposed participants, and an indication of the
approximate time requested to make their presentation on or before
February 14, 2014. Time allotted for each presentation may be limited.
If the number of registrants requesting to speak is greater than can be
reasonably accommodated during the scheduled open public hearing
session, FDA may conduct a lottery to determine the speakers for the
scheduled open public hearing session. The contact person will notify
interested persons regarding their request to speak by February 18,
2014.
    Persons attending FDA's advisory committee meetings are advised
that the Agency is not responsible for providing access to electrical
outlets.
    FDA welcomes the attendance of the public at its advisory committee
meetings and will make every effort to accommodate persons with
physical disabilities or special needs. If you require special
accommodations due to a disability, please contact Walter Ellenberg at
least 7 days in advance of the meeting.
    FDA is committed to the orderly conduct of its advisory committee
meetings. Please visit our Web site at http://www.fda.gov/AdvisoryCommittees/AboutAdvisoryCommittees/ucm111462.htm for procedures
on public conduct during advisory committee meetings.
    Notice of this meeting is given under the Federal Advisory
Committee Act (5 U.S.C. app. 2).

    Dated: January 8, 2014.
Jill Hartzler Warner,
Acting Associate Commissioner for Special Medical Programs.
[FR Doc. 2014-00475 Filed 1-13-14; 8:45 am]
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