In response to the global financial crisis, the International Accounting Standards Board (IASB) amended two of its standards to more closely align with U.S. GAAP. The amendments to IAS 39, Financial Instruments: Recognition and Measurement, and IFRS 7, Financial Instruments: Disclosures, permit the reclassification of some financial instruments. The amendments to IAS 39 introduce the possibility of reclassifications for companies applying International Financial Reporting Standards (IFRS), which were already permitted under U.S. GAAP in rare circumstances. Companies can implement the reclassification amendments to IFRS from July 1, 2008.
The European Union (EU) adopted the IASB’s amendments to IAS 39 and IFRS 7 on Oct. 15, just two days after their release by the IASB.
In addition, the IASB said it would undertake the following:
- Continue to ensure that any IFRS guidance on fair value measurement of financial instruments in markets that are no longer active is consistent with U.S. GAAP.
- Work closely with FASB to develop a common approach to issues related to the valuation of financial assets and liabilities resulting from purchases made through the U.S. Emergency Economic Stabilization Act of 2008 and any other similar programs internationally, if and when these programs are implemented.
For more information about the IASB’s response to the credit crisis, see www.iasb.org/credit+crisis.htm.