AICPA | www.IFRS.com

FASB and IASB Convergence Projects

Follow progress of convergence efforts between the U.S. Financial Accounting Standards Board and the International Accounting Standards Board. Links to the most current work plans of the standard setters are provided below, in addition to progress reports from standard setters, frequently asked questions on exposure drafts and other resources to help you keep track of accounting convergence.
 

Transition Group Formed by IASB and FASB to Address Revenue Recognition
July 31, 2013 - Russell Golden, FASB Chairman, indicates that the purpose of the group will be to help resolve any issues of diversity that may arise as companies and other entities move toward implementing the final revenue recognition standard. (AccountingToday)

Standards for Financial Instruments Accounting Are Focus of FASB’s Revised Proposal
February 14, 2013 - The Board is requesting public comment on its latest proposal revisions, which include a framework for measurement and classification of financial instruments, aimed at facilitating convergence with IFRS. (AccountingToday)
 

Changes to Revenue Recognition Proposals By IASB and FASB
Article is second part of a discussion related to the IASB/FASB jointly-released Exposure Draft, "Revenue From Contracts With Customers," and addresses the principle of control, performance obligations, and issues in calculation of transaction price. (BusinessWorld)
 

Summary of Board Decisions — FASB/IASB Joint Videoconference Board Meeting
Two broad topics were deliberated: Accounting for Financial Instruments — Classification and Measurement, and Accounting for Financial Instruments—Impairment. (FASB.org)
 

IASB and FASB Seek to Reduce Differences in Classification and Measurement Models for Financial Instruments
London and Norwalk, CT, January 27, 2012 — The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today agreed to work together to seek to reduce differences in their respective classification and measurement models for financial instruments. (FASB.org)
 

Changes to Revenue Recognition Proposals By IASB and FASB
A revised exposure draft, released in November 2011, entitled "Revenue from Contracts with Customers," will be adopted by IFRS as well as US GAAP reporters and includes changes related to segmentation and transaction price. (BusinessWorld)
 

New Report from Fitch Ratings Indicates Incorporation of IFRS into U.S. GAAP Still Likely to Occur, Although in Cautious, Measured Approach
Report points out that progress on many joint FASB/IASB projects has been slowed by necessity of re-exposure of updated proposals for comments, with some completion dates now extending into 2013. (MarketWatch.com)
 

FASB, IASB Chiefs Agree New Convergence Model is Needed
The heads of the U.S. and international accounting boards that have been working to resolve standards differences agree that their current convergence process should be replaced by one that is more manageable and effective. (Journal of Accountancy)
 

SEC Staff Paper: A Comparison of U.S. GAAP and IFRS
November 16, 2011 - The staff paper provides a summary of similarities and differences between the two sets of standards. It also describes the status of the convergence efforts of the FASB and IASB in aligning various standards as part of their Memorandum of Understanding (MoU).
 

IASB and FASB Publish Revised Proposal for Revenue Recognition
November 14, 2011 - The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today issued for public comment a revised draft standard to improve and converge the financial reporting requirements of International Financial Reporting Standards (IFRSs) and US General Accepted Accounting Principles (GAAP) for revenue (and some related costs) from contracts with customers. (FASB.org) (Exposure Draft)
 

IASB proposes to exempt investment entities from consolidation requirements
August 25, 2011 - The International Accounting Standards Board (IASB) published proposals to define investment entities as a separate type of entity that would be exempt from the accounting requirements in IFRS 10 Consolidated Financial Statements. (IFRS.org)
 

IASB and FASB announce intention to re-expose leasing proposals
July 21, 2011 - The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) announced today their intention to re-expose their revised proposals for a common leasing standard. (IFRS.org)
 

Committee on Private Company Reporting receives briefing by FASB on convergence projects
June 29, 2011 - The Private Company Financial Reporting Committee, a joint committee of the Financial Accounting Standards Board and the American Institute of CPAs, was briefed by the FASB on the progress of several convergence projects. PCFRC provided input on a number of issues, said chair Judy O’Dell, such as revenue recognition where there are proposed disclosure differences for private companies. (Accounting Today)

IASB and FASB align presentation requirements for other comprehensive income
June 16, 2011 - The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB), the US national standard-setter, issued today amendments that will improve and align the presentation of items of other comprehensive income (OCI) in financial statements prepared in accordance with International Financial Reporting Standards (IFRSs) and those prepared in accordance with US generally accepted accounting principles (GAAP). (IFRS.org)

FASB Issues Accounting Standards Update to Improve Presentation of Comprehensive Income
June 16, 2011 - The Financial Accounting Standards Board (FASB) today issued Accounting Standards Update (ASU) No. 2011-05 Comprehensive Income (Topic 220): Presentation of Comprehensive Income. The Update is intended to increase the prominence of other comprehensive income in financial statements. (FASB Update No. 2011-05)

IASB and FASB to Re-Expose Revenue Recognition Proposals
June 15, 2011 - The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) agreed today to re-expose their revised proposals for a common revenue recognition standard. Re-exposing the revised proposals will provide interested parties with an opportunity to comment on revisions the boards have undertaken since the publication of an exposure draft on revenue recognition in June 2010. (FASB.org)

FASB, IASB Issue "Largely Identical" Guidance on Fair Value
FASB and the International Accounting Standards Board (IASB) issued guidance on fair value measurement and disclosure requirements that the boards said in a press release is "largely identical" across IFRS and U.S. GAAP. (Journal of Accountancy)

IASB and FASB issue common fair value measurement and disclosure requirements
May 12, 2011 — The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) today issued new guidance on fair value measurement and disclosure requirements for International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP). (FASB ASU No. 2011-04)

AICPA Publishes Briefs on Convergence Projects
The AICPA published three Accounting and Auditing Briefs to keep its members informed about the progress of three important convergence projects between the U.S. Financial Accounting Standards Board and the International Accounting Standards Board. Links to the three Briefs follow:

• The FASB/IASB Revenue Recognition Accounting Project
• FASB Financial Instruments Project: An Update
• The FASB/IASB Lease Accounting Project

IASB and FASB Report Progress on Convergence
April 21, 2010 — FASB and the International Accounting Standards Board (IASB) on Thursday published a progress report on their joint convergence projects. (Journal of Accountancy)

IASB and FASB Report Substantial Progress Towards Completion of Convergence Program
April 21, 2011 — The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) today published a progress report on their joint work to improve International Financial Reporting Standards (IFRSs) and US generally accepted accounting practices, and to bring about their convergence. (Read the April 2011 Progress Report)

Interview with Sir David Tweedie and Leslie Seidman regarding the timeline for completing the convergence programme
April 14, 2011 - Sir David Tweedie, Chairman of the IASB, and Leslie Seidman, Chairman of the FASB, have recorded an interview in which they review the achievements of the convergence programme so far, and the timeline for completing the remaining elements of the programme. (IFRS.org)

Condorsement: FASB's Potential New Role Under IFRS
In part three of this exclusive JofA interview, FASB Chairman Leslie Seidman shares her thoughts on how FASB might function in an IFRS world. (Journal of Accountancy)

FASB Chairman Provides Update on Financial Instruments
In part two of this exclusive JofA interview, FASB Chairman Leslie Seidman provides updates on accounting for financial instruments. (Journal of Accountancy)

FASB Balances Revenue Recognition Guidance With Principles
In the first of a five-part exclusive JofA interview, FASB Chairman Leslie Seidman shares her thinking on how the board is likely to deal with calls for more detailed implementation guidance for its new standard on revenue recognition. (Journal of Accountancy)

Podcast: General Update from FASB Chairman on Progress of MoU Projects
March 16, 2011 - FASB Chairman Leslie Seidman presents an update on progress on the Memorandum of Understanding priority projects that are key to the global convergence of accounting standards. (FASB.org)

Accounting for Leases
In August 2010, the IASB and the FASB jointly issued a draft standard on the accounting treatment of leases that intended to replace the current literature on leases under U.S. GAAP and IFRS. The Corporate Finance Insider provides an update on the project.

IASB and FASB Propose Common Solution for Impairment Accounting
January 31, 2011 - The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) have today published for public comment proposals for accounting for impairment of financial assets such as loans managed in an open portfolio. Supplementary Document (FASB.org)

IASB and FASB Propose to Align Balance Sheet Netting Requirements
January 28, 2011 - The International Accounting Standards Board (IASB) and the US-based Financial Accounting Standards Board (FASB) have published a proposal to establish a common approach to offsetting financial assets and financial liabilities on the statement of financial position (balance sheet). Exposure Draft (FASB.org)

Compromise Reached for Financial Instruments; Revenue Recognition and Leases Less Certain
January 25, 2011 - FASB Chairman Leslie Seidman said Tuesday via webcast that FASB and the International Accounting Standards Board (IASB) have reached a compromise on a single approach to impairment for financial instruments. (Journal of Accountancy)

Lease Proposal Fails to Address Application Issues
January 11, 2011 - The AICPA's Financial Reporting Executive Committee (FinREC) commented on FASB's Proposed Accounting Standards Update, Leases. The exposure draft was developed jointly with the International Accounting Standards Board (IASB). Comment Letter (Journal of Accountancy)

AICPA: Revenue Recognition Proposal Impractical
December 14, 2010 - The AICPA's Financial Reporting Executive Committee (FinREC) this week voiced extensive concerns with a joint FASB-IASB proposed standard on revenue recognition that is intended to apply across all industry sectors. (Journal of Accountancy)

IASB and FASB report continued progress in their work to converge IFRSs and US GAAP
November 29, 2010 - The IASB and the FASB published a progress report on their work to improve IFRSs and US GAAP and to bring about their convergence. This is the standard setters’ third progress report on their work plan. Progress Report (IFRS.org) FASB, IASB: Convergence Priorities on Target for June 2011 (Journal of Accountancy)

FASB Sharpens Focus
November 17, 2010 - Leslie Seidman, acting FASB chairman, said the Board will focus on completing five priority projects by 2011. The projects are part of the joint convergence program with the IASB. CFO.com provides an overview.

Issues being considered by the IFRS Interpretations Committee
Details of items currently being considered by the IFRS Interpretations Committee, including items recently removed from the Interpretations Committee agenda, can be found here. (IFRS.org)

FASB-IASB Exposure Drafts on Leases: Questions and Answers
August 27, 2010 - On August 17, 2010, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) published for public comment exposure drafts on Leases. The American Institute of Certified Public Accountants has developed questions and answers to highlight important aspects of the proposals.

IASB and US FASB Publish Proposals to Improve the Financial Reporting of Leases
August 17, 2010 - The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) today published for public comment joint proposals to improve the financial reporting of lease contracts. (FASB.org)
News Release | Exposure Draft

FASB/IASB Proposed Revenue Recognition Standard: Questions and Answers
August 2010 - On June 24, 2010, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) published for public comment an exposure draft, Revenue from Contracts with Customers. The American Institute of Certified Public Accountants has developed questions and answers to highlight important aspects of the project.

Convergence Milestone
July 26, 2010 - FASB and the IASB wrapped up the first of three rounds of issuing proposed standards in their final push toward U.S. GAAP-IFRS convergence, even as they gave themselves an extra six months to complete the ambitious project. (Journal of Accountancy)

Revenue Recognition
On June 24, the U.S. Financial Accounting Standards Board and the International Accounting Standards Board issued a proposed standard for revenue recognition. The core principle would require an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it receives, or expects to receive, in exchange for those goods or services. Following are links to the FASB and IASB Revenue Recognition Project pages:

FASB Project Page – Revenue Recognition
IASB Project Page – Revenue Recognition

IASB and FASB update to G20 Leaders on modified convergence strategy
June 24, 2010 - The IASB and the FASB today wrote to the G20 Leaders outlining their modified strategy for completing their convergence work. The modified strategy retains the target completion date of June 2011 or earlier for the MoU projects for which the boards believe the need for improvement is the most urgent. Download June 24, 2010 Progress Report. (IASB.org, FASB.org)

Spotlight on Work Plan for Global Accounting Standards
The U.S. Securities and Exchange Commission has long promoted the development of a single set of high-quality, globally accepted accounting standards and in February 2010 directed staff to develop and execute a Work Plan regarding this process. (SEC.gov)

Countdown to Convergence
February 25, 2010 - This article provides a synopsis priority convergence projects in the FASB and IASB Memorandum of Understanding. Because the projects are active and subject to change, updates will be posted periodically to the online version of this article at journalofaccountancy.com. (Journal of Accountancy)

IASB and FASB Reaffirm Commitment to Memorandum of Understanding
November 5, 2009 - At their joint meeting last week, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) reaffirmed their commitment to improve International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (U.S. GAAP) and to bring about their convergence. The Boards also agreed to intensify their efforts to complete the major joint projects described in their 2006 Memorandum of Understanding (MoU), as updated in 2008. (FASB.org) (IASB.org)

FASB/IASB Memorandum of Understanding

After their joint meeting in September 2002, the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued the Norwalk Agreement, in which they “each acknowledged their commitment to the development of high quality, compatible accounting standards that could be used for both domestic and cross-border financial reporting. At that meeting, the FASB and the IASB pledged to use their best efforts (a) to make their existing financial reporting standards fully compatible as soon as is practicable and (b) to co-ordinate their future work programs to ensure that once achieved, compatibility is maintained.”

In February 2006, the FASB and IASB issued a Memorandum of Understanding (MoU). The MoU set forth the relative priorities within the FASB-IASB joint work programs in the form of specific milestones to be reached by 2008.

In developing the MoU published in 2006, the Boards agreed on priorities and established milestones only to 2008, even though they knew that many of the major standards level projects would not be complete by that date. At their joint meeting in April 2008, the Boards again affirmed their commitment to developing common, high quality standards, and agreed on a pathway to completing the MoU projects, including projected completion dates.

The following is a description of the agreed-upon pathway for completing the MoU projects that discusses separately short-term convergence projects and major joint projects. Also described is the relationship between those MoU projects and the joint conceptual framework project, which is not formally part of the MoU work plan.

 

Completing the February 2006 Memorandum of Understanding:
A progress report and timetable for completion September 2008

Top