FASB Members Favor Convergence with IAS 1, IAS 10

FASB members favor shifting to international rules for an auditor’s evaluation of an entity’s ability to function as a going concern. The rules under U.S. GAAP would converge with the International Accounting Standards Board’s International Accounting Standard (IAS) 1, Presentation of Financial Statements, and IAS 10, Events after the Balance Sheet Date, supplemented by the disclosure requirements in Statement on Auditing Standards no. 1, Codification of Auditing Standards and Procedures, and AU section 341, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern.

The board also decided that the guidance should converge with IAS literature with respect to the time horizon for the going concern assessment. FASB will issue exposure drafts of the new guidance with a 60-day comment period. For information, visit www.fasb.org.