In response to a letter by the Center for Audit Quality (CAC), the staff of the SEC has issued a no-action letter that states that foreign private issuers that prepare their financial statements under IFRS rules are not required to submit XBRL exhibits and post them on their corporate websites until the Commission specifies on its own website a taxonomy for use by these issuers.

Under the SEC's XBRL mandate, foreign private issuers are in the third and final group of companies to be required to file XBRL statements, with their first submissions due this June. Under SEC rules, firms are required to use taxonomies posted on the SEC's Standard Taxonomies page; if no taxonomy has been posted, filers do not have an approved taxonomy they can use for their XBRL statements.

In its letter to the SEC, the CAC expressed its concerns about the IFRS taxonomy, stating that "...it is our understanding that users of the IFRS Taxonomy 2011 still may need to create numerous extensions for their interactive data exhibits, which may limit the usefulness of such interactive data to users of financial statements. Such extensions may be needed because IFRS Taxonomy 2011 does not yet fully address common reporting practice or industry specific disclosures and does not include standard definitions..."

In response, the SEC states "we are of the view that foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB are not required to submit to the Commission and post on their corporate websites, if any, Interactive Data Files until the Commission specifies on its website a taxonomy for use by such foreign private issuers in preparing their Interactive Data Files."

Accordingly, foreign private issuers will need to prepare their IFRS financial statements in accordance with the SEC's XBRL mandate interactive data reporting requirements when the SEC specifies a taxonomy on its website. The letter to the CAC did not indicate an extension in submission deadlines, however, and the SEC has not said if there will be a deferral of the effective date when it specifies an IFRS taxonomy for use.