Chronology
Timetable
Background
The objective of this project is to eliminate a variety of differences between International Financial Reporting Standards and US GAAP. The project, which is being done jointly by FASB and IASB, grew out of an agreement reached by the two boards in October 2002 (see below).
Separate Pages for Individual Convergence Projects
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We have created separate web pages on IAS Plus for convergence work on each individual IAS. Click below for link to the separate pages for current projects:
Also, one aspect of the convergence project is finished – convergence in the areas of asset disposals and discontinued operations:
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October 2002: IASB-FASB Memorandum of Understanding on Convergence
On 29 October 2002, the International Accounting Standards Board and the US Financial Accounting Standards Board jointly issued a memorandum of understanding formalising their commitment to the convergence of US and international accounting standards. The IASB and the FASB presented the agreement to the chairs of leading national standard setters at a two-day meeting in London on 28-29 October. Click for:
February 2006: Updated IASB-FASB Convergence Agreement
On 27 February 2006, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) published a Memorandum of Understanding (MOU) that reaffirms the boards' shared objective of developing high quality, common accounting standards for use in the world's capital markets. The MOU is a further elaboration of the objectives and principles first described in an MOU published in October 2002.
While the new document does not represent a change in the boards' convergence work programme, it does reflect the context of the US SEC's 'roadmap' for the removal of the reconciliation requirement for non-US companies that use IFRSs and are registered in the United States. It also reflects the work undertaken by the Committee of European Securities Regulators (CESR) to identify areas for improvement of accounting standards.
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Both the FASB and the IASB note that removing the current reconciliation requirements will
require continued progress on the boards' convergence programme. Accordingly, the MOU
sets out milestones that the FASB and the IASB believe are achievable...
The boards agreed that trying to eliminate differences between standards that are both in need
of significant improvement is not the best use of resources. Instead, new common standards
should be developed. Consistent with that principle, convergence work will continue to
proceed on the following two tracks:
- First, the boards will reach a conclusion about whether major differences in focused
areas should be eliminated through one or more short-term standard-setting projects,
and, if so, the goal is to complete or substantially complete work in those areas by
2008.
- Second, the FASB and the IASB will seek to make continued progress in other areas
identified by both boards where accounting practices under US GAAP and IFRSs are
regarded as candidates for improvement.
The goal by 2008 is to reach a conclusion about whether major differences in the following
few focused areas should be eliminated through one or more short-term standard-setting
projects and, if so, to complete or substantially complete work in those areas.
Topics for short-term convergence include:
| To be examined by the FASB | To be examined by the IASB |
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| Fair value option* | Borrowing costs |
| Impairment (jointly with the IASB) | Impairment (jointly with the FASB) |
| Income tax (jointly with the IASB) | Income tax (jointly with the FASB) |
| Investment properties** | Government grants |
| Research and development | Joint ventures |
| Subsequent events | Segment reporting |
FASB Note:
*Already on FASB's active agenda
** To be considered by the FASB as part of the fair value option project |
IASB Note:
Topics are part of the IASB's existing short-term convergence project except for impairment, which will be added to that project |
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The two boards will meet on 27 and 28 April 2006 in London, when they will discuss topics described in the MOU. Click for:
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