FASB & IASB continue convergence project, wait for SEC

FASB and the International Accounting Standards Board (IASB) are working more closely to converge U.S. GAAP with the International Financial Reporting Standards; however, “the ball is in the SEC’s court” according to FASB Chairman Bob Herz , speaking as a panelist at a Financial Executives International (FEI) conference this week.

IASB board member and fellow panelist Patrick Finnegan said that the IASB wants both the U.S. and Japan to adopt IFRS. However, he noted that the world’s two biggest economies remain uncommitted to adopting IFRS.

FASB and the IASB recently issued a joint statement that described their plans and milestone targets as they agreed to intensify their efforts toward convergence and to meet monthly.

“I am greatly encouraged by the commitment of the IASB and the FASB to provide greater transparency to the standard setting process and their convergence efforts,” SEC Chairman Mary Schapiro said. “I believe that these efforts will result in improved financial information provided to investors.”

FASB and the IASB are trying to work together on the most controversial accounting standards. That has sometimes been an exercise in futility as many of the standards each has issued have caused significant controversy, including the IASB’s IFRS 9 Financial Instruments which was issued last week.  Finnegan noted that the IASB will be working in consultation with FASB on IFRS 9, which was not endorsed by the European Commission, which had requested the new standard.

Similarly, FASB deferred work on FAS 167, Amendments to FASB Interpretation No. 46(R), until it can work with the IASB on a converged solution. 

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