On 1 July 2009, the FASB Accounting Standards Codification is expected to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (GAAP):

• Replacement of existing standards. Pending approval by the FASB, after 1 July 2009, only one level of authoritative GAAP will exist, other than guidance issued by the Securities and Exchange Commission (SEC). All other literature will be non-authoritative.
• Subsequent issuance of new standards. There will also be an important change in how standards are issued after the Codification becomes GAAP. The FASB will no longer issue Statements of Financial Accounting Standards, Interpretations, FASB Staff Positions, or EITF Abstracts. Rather, all changes to GAAP, regardless of how they would have been issued currently, will be in the form of Codification Updates.

To explain the forthcoming changes, we have posted a story Major Changes to U.S. GAAP Structure Slated for July 1, 2009 (PDF 37k), published in the December 2008 issue of The FASB Report, with permission from the Financial Accounting Foundation, 401 Merritt 7, Norwalk, Connecticut, USA.

The article (PDF 142k) is from the February 2009 issue of the International Journal of Disclosure and Governance, is copyright 2009 by Palgrave Macmillan, and has been posted on IAS Plus with their kind permission. The article discusses:

• the IASB's reasons for issuing an IFRS for private entities [the name has been changed to IFRS for Non-publicly Accountable Entities],
• the types of entities at which it is aimed,
• what the IASB proposed in the ED and why,
• what the IASB has not proposed, and why not,
• how the IASB reached the conclusions that it did,
• how the IASB plans to maintain the standard after it is issued,
• comment letter responses to and field testing of the ED,
• the IASB's re-deliberations,
• the remaining steps leading to a final IFRS, and
• plans for training materials.

 

International Accounting Standards Board

• Exposure Draft ED/2009/1: Post-implementation Revisions to IFRIC Interpretations (Proposed amendments to IFRIC 9 and IFRIC 16) – issued 30 January 2009, comments due 2 March 2009
• Exposure Draft: Relationships with the State (Proposed amendments to IAS 24) – issued 11 December 2008, comments due 13 March 2009
• Exposure Draft 10: Consolidated Financial Statements – issued 18 December 2008, comments due 20 March 2009

International Accounting Standards Committee Foundation

• IASCF Discussion Document: Part 2 of the Constitution Review – issued 8 December 2008, comments due 31 March 2009

The Roadmap was issued by the SEC on 14 November 2008. The Roadmap sets forth several milestones that, if achieved, could lead to the required use of IFRS by US issuers in 2014. The SEC's deadline for commenting on the Roadmap is 20 April 2009.

Click for:

• Hoja de Ruta Para el Uso Potencial de Estados Financieros Preparados de Acuerdo con los Estándares Internacionales de Informatión Financiera, por Parte de los Emisores de los Estados Unidos (PDF 877k, Español)
• Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by US Issuers (PDF 419k, English)
• More Information about the Roadmap on IAS Plus.

The report addresses:

• how to organise the supervision of financial institutions and markets in the EU
• how to strengthen European cooperation on financial stability oversight, early warning, and crisis mechanisms; and
• how EU supervisors should cooperate globally.

Throughout the Report, accounting is cited as one of the causes of the current global financial crisis. The Report urges that the IASB or supervisors set limits on mark-to-market accounting:

To ensure convergence of accounting practices and a level playing-field at the global level, it should be the role of the International Accounting Standard Board (IASB) to foster the emergence of a consensus as to where and how the mark-to-market principle should apply – and where it should not. The IASB must, to this end, open itself up more to the views of the regulatory, supervisory and business communities. This should be coupled with developing a far more responsive, open, accountable and balanced governance structure. If such a consensus does not emerge, it should be the role of the international community to set limits to the application of the mark-to-market principle.

The following is Recommendation #4 of the Report:

Recommendation 4: With respect to accounting rules the Group considers that a wider reflection on the mark-to-market principle is needed and in particular recommends that: expeditious solutions should be found to the remaining accounting issues concerning complex products; accounting standards should not bias business models, promote pro-cyclical behaviour or discourage long-term investment; the IASB and other accounting standard setters should clarify and agree on a common, transparent methodology for the valuation of assets in illiquid markets where mark-to-market cannot be applied; the IASB further opens its standard-setting process to the regulatory, supervisory and business communities; the oversight and governance structure of the IASB be strengthened.

Click for:

• Full report (PDF 657k)
• Summary (PDF 89k)
• IAS Plus Credit Crunch Page

Click for:

• The FEE statement (PDF 41k).
• More information on the EC proposal in our earlier story.

The current consultation aims at raising issues relating to the modernisation and simplification of the Accounting Directives. The kinds of issues on which comments are requested include:

• Structure of the Directives
• General principles of accounting recognition and measurement
• Size criteria for micros, small, medium, and large entities
• Which financial statements should be required for each category
• Electronic filing
• Financial statement formats
• Footnotes
• Valuation (measurement) issues
• Consolidation requirements

Comments are requested by 30 April 2009. The Commission expects to complete its analysis of the comments and to present proposed revisions to the Directives to the European Parliament by the end of 2009.

Click for:

• The EC Consultation Document (MS Word DOC 561k).
• More information in our 26 February 2009 story.