FASB and the International Accounting Standards Board (IASB) released a convergence progress report on Monday that said their priority projects are on target for completion by June 2011 or earlier. (For recent JofA coverage of the FASB-IASB convergence project, see “Convergence Milestone,” Aug. 2010, page 26.)
The priority projects, which were identified in the boards’ June 2010 progress report, include:
- Joint projects on financial instruments, revenue recognition, leases, the presentation of other comprehensive income, and fair value measurement; and
- For the IASB, improved disclosures about derecognized assets and other off-balance-sheet risks (aligning with recently issued U.S. GAAP requirements), consolidations (particularly in relation to structured entities) and its project on insurance contracts.
Since the June 2010 report, the IASB finalized improvements to derecognition disclosures and the presentation of own credit gains and losses when entities have elected to measure liabilities at fair value. Both boards issued consultative documents on revenue recognition, leasing, insurance, and effective date and transition methods.
The boards said that in their joint meeting in November they affirmed the priorities listed in the June report. To accommodate the goal of completing the aforementioned priority projects by June 2011, the standard setters amended aspects of their strategies and plans for other projects. Those changes include:
- Deferring until after June 2011 substantive deliberations on four projects—the broader financial statement presentation project, financial instruments with characteristics of equity, emissions trading schemes, and the reporting entity phase of the conceptual framework.
- Agreeing that consolidation of investment companies is no longer a priority for June 2011. The boards aim to complete that joint project by the end of 2011.
- Deferring deliberations on several of each board’s independent standards-setting projects (such as contingency disclosures for FASB and IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and annual improvements for the IASB). The boards said staff have been reassigned to the high-priority projects.
More from the JofA: