IASB and FASB Clash Yet Again Over Impairment Issues
International Accounting Standards Board and Financial Accounting Standards Board have yet again clashed with each other in a meeting held in London. Both the boards had a heated discussion regarding the delay in the project related to financial instrument impairment. FASB rejected the plans regarding modifying financial instrument impairment standard that have been designed by International Accounting Standards Board.
International Accounting Standards Board was expecting that FASB would agree to their plans during the meeting and was planning to begin the drafting of the final accounting standards in order to publish it in the autumn as they had committed to the G20 that they will finalize their convergence projects by somewhere in the middle of the year 2013.
On the other hand, staff members of Financial Accounting Standards Board stated that proposals were not auditable, operable and was not easy to understand and they needed some more time for consultations.
FASB’s chairman Leslie Seidman also stated that project won’t be delayed as a review will conducted during a break in the summers, when both the bodies won’t be meeting with each other.
Both the boards have agreed that discussions regarding lease project as well as plans for re-exposure draft will be carried out as planned. But as many as three members of FASB have already stated that they will not be supporting the proposal. Given that there are a total of seven members in FASB if even one of the members joins the other three members, then the project will go down the drain.
Hans Hoogervorst, IASB’s chief stated that it is sad and embarrassing the FASB and IASB have not been able to agree to each other, despite having met three times. While both the bodies will meet each other again in the month of September, IASB is thinking of continuing its plans and preparing impairment exposure draft. They will wait for FASB’s stance till September. Even though IASB and FASB financial instrument proposals are not converged closely, G20 has requested the two boards to join hands and come up with single accounting standard related to impairment.