FSB seeks simplified global financial instruments accounting
28 Sep 2009
The Financial Stability Board (FSB) has urged the IASB and FASB to simplify, improve, and converge their accounting standards for financial instruments "in a manner that does not expand the use of fair value in relation to the lending activities (involving loans and investments in debt instruments) of financial intermediaries".
The FSB was established to coordinate the policies by which countries regulate and supervise financial institutions. Click for FSB Statement (PDF 56k).
Here is an excerpt:
At present, the IASB and the US Financial Accounting Standards Board (FASB) are considering a variety of approaches which could possibly lead to divergences between IASB and FASB standards with respect to:
Moreover, continuing differences in accounting requirements of the IASB and FASB for netting/offsetting of assets and liabilities also result in significant differences in banks' total assets, posing problems for framing an international leverage ratio.
Therefore, additional work in the areas above is urgently needed in order to meet the important objectives of convergence, transparency and the mitigation of procyclicality, as standard setters continue their efforts to improve the quality of their standards and reduce the complexity of their standards on financial instruments.