Financial Regulators Bare Milestone for Works on Accounting Standards
The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) have jointly issued a progress report on the development of their efforts to converge the International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).
IASB chairman David Tweedie said the report includes “substantial progress” on the Board’s work on improving and aligning the IFRS with the US accounting standards, adding that more time is needed to finalize the rest of the convergence program.
The report was published amid announcement by the US Securities and Exchange Commission to sponsor a roundtable in July to discuss the benefits and challenges in converging IFRS and US GAAP.
The roundtable discussion will allow for a careful consideration of the role of international accounting standards in the US financial reporting system; whether it will serve for the best interest of US investors and markets according to SEC Chief Accountant James Kroeker.
So far, the IASB and FASB have completed the three remaining MoU projects covering financial instruments accounting, leasing and revenue recognition. The Boards have also made substantial progress in improving and aligning the US and international insurance accounting standards.
In finalizing the convergence program, the Boards decided to extend beyond June this year the time frame needed to complete the remaining priority convergence projects. Within this time, the IASB and FASB will seek consultation with stakeholders “in a manner consistent with an open and inclusive due process.”
The Boards expect to complete the convergence of the international and US accounting standards by the second half of 2011. However, the US insurance accounting standards are expected to wind down in the first half of 2012.
Meanwhile, the IASB will issue next week the new standards on consolidated financial statements, joint arrangements and post-employment benefits. Likewise, the two financial regulators will introduce new requirements related to fair value measurement and the presentation of other comprehensive income.
Stakeholders can also take part in the remaining steps of the convergence program, according to FASB chairperson Leslie Seidman, who confirmed that they will have the chance to go over the draft accounting standards before finalization.