IASB and FASB to Reduce Differences in Models
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) models for financial instruments are to be more closely related under new agreements between the two boards.
The move is part of the FASB’s ongoing redeliberation of a proposed accounting standards update on financial instruments, which was originally issued in May 2010. The IASB will consider these discussions as part of its project to undertake limited-scope changes to IFRS 9, Financial Instruments, issued in November 2009 and amended in October 2010, resulting fr om its ongoing work to develop a new IFRS on insurance contracts and the feedback received on application of IFRS 9 to particular instruments.
The boards will work together with the objective of more closely aligning key aspects of their classification and measurement models.
The boards will explore these key aspects jointly, and then decide whether to issue proposed amendments to IFRS 9 and US GAAP, respectively.
IASB chairman Hans Hoogervorst said: ‘When IFRS 9 was introduced in 2009 we said that further amendments might be required once the direction of travel on insurance contracts became clear. We are now at that point. At the same time, this lim ited-scope review now presents an ideal opportunity to align IFRS and US GAAP more closely, in this important area of financial reporting. We will proceed with caution, recognising the investment that many jurisdictions have made in preparing for the introduction of IFRS 9 in 2015.’
The boards intend to hold a joint webcast introducing IFRS 13 and the update to Topic 820.