The Securities and Exchange Commission may be getting closer to approving the latest IFRS Taxonomy to enable U.S. IFRS filers to begin submitting financial statements in XBRL.

The IFRS Foundation recently published its 2014 IFRS Taxonomy, a kind of dictionary to define specific tags that direct individual data points in financial statements to a machine-readable, interactive XBRL filing. The SEC requires all U.S. filers to use an SEC-approved taxonomy to submit financial statements in XBRL, but foreign-private issuers who file under IFRS have been relieved of the XBRL filing requirement since it first took effect for that population of U.S. registrants in 2011.

The IFRS Taxonomy has been maintained and updated by the IFRS Foundation with support from the International Accounting Standards Board, just as the Financial Accounting Standards Board annually updates a U.S. GAAP Taxonomy used by GAAP filers. GAAP filers began complying with the SEC's XBRL filing requirement in a three-year phased implementation from 2009 through 2011.

While the SEC has annually approved FASB's updated GAAP Taxonomy, it has not found the IFRS Taxonomy fit for XBRL use in the United States. As the XBRL filing requirement was due to take effect in early 2011, the SEC wrote a letter to the Center for Audit Quality indicated it did not expect IFRS filers to meet the XBRL filing requirement without an approved IFRS Taxonomy.

The SEC has said it wanted to see more tags in the IFRS Taxonomy to create more detailed mapping of financial data, ultimately making financial statements more easily comparable across capital markets. The SEC also was concerned about design differences between the GAAP and IFRS taxonomies. In 2012, the SEC said it saw no solution in sight for how to get satisfied with the IFRS Taxonomy. 

The SEC did not comment on whether the newest IFRS Taxonomy reflects the modifications SEC staff members are hoping to see. Mike Starr, director of strategic initiatives at Webfilings and a former deputy chief accountant at the SEC, says he's reviewed the latest Taxonomy; he believes it addresses many of the concerns raised by SEC staff regarding prior versions of the taxonomy. “We believe that the IASB has adequately addressed those concerns and therefore see no reason why the staff should not recommend the IFRS XBRL taxonomy to the commission for approval,” he said.

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