In terms of scenario planning, the first subscenario would require minimal planning but the second scenario could reasonably be considered the "worst case" scenario and require extensive planning and preparation.

What are the specific planning implications of each scenario/subscenario? First, if the SEC continues to require public U.S. companies to use U.S. GAAP, no special plan is needed. Alternatively, if the SEC allows its domestic registrants to choose between future U.S. GAAP and future IFRS, CFOs will need to adopt a methodology for choosing and implementing their choice. If the SEC requires all of its registrants to use future IFRS without significant standard-level convergence having been attained between U.S. GAAP and IFRS, significant assessment and conversion efforts must be anticipated. Fortunately, those activities are now fairly well defined and widely accessible, thanks to the fact that thousands of companies around the world have converted from various country-specific GAAPs to IFRS in recent years.

Private-Company Standards
The fourth key area of uncertainty is whether the private-company standard-setting process will remain closely coupled to the public-company process in the United States. The outcome of the "blue-ribbon" panel that is currently studying this issue may be that private-company financial-reporting standards will be separate and distinct from public-company standards, in which case, private companies will be better off than they are today because significant costs will be driven out of their financial-reporting supply chain. If decoupling doesn't happen, private companies won't be worse off than they are today, and in neither case would public companies be affected.

Planning for the alternative scenarios in this area resembles planning for other areas. If there's no change to the status quo, no special plan is needed. If decoupling does happen, private-company CFOs should be prepared to exploit the cost-reduction opportunities that will arise.

To be sure, CFOs who apply scenario-planning techniques to the uncertainties about IFRS in the United States often will be pleased to discover that the future holds many opportunities and few threats.

Contributor Bruce Pounder is president of Leveraged Logic and is the immediate past chair of the Small Business Financial and Regulatory Affairs Committee of the Institute of Management Accountants (IMA). He is also the lead developer and presenter for the Webcast series "This Week in Accounting."

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