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SEC Moves to Relax Accounting Rules for Foreign Firms

The Securities and Exchange Commission on Wednesday took a step toward allowing foreign public companies to choose between filing data under international accounting standards and U.S. rules.

The SEC proposal sets the stage for foreign companies listed in the United States to issue their financial reports using the English version of International Financial Reporting Standards (IFRS) instead of U.S. Generally Accepted Accounting Principles, or GAAP.

The change is part of the SEC's roadmap to eliminate by 2009 the requirement that foreign companies reconcile their financial statements to U.S. GAAP, and brings the United States closer to other major financial centers that have embraced international reporting standards.