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 (the 'Norwalk Agreement').
The IASB-FASB convergence project was of particular importance as:
- The US Securities and Exchange Commission (SEC) was considering whether to adopt, or allow, IFRS for use by domestic issuers in the United States, and gave consideration to the success of the convergence process as part of this assessment.
- The Leaders of the Group of 20 (G20) issued a statement in 2009 calling for the convergence of accounting standards in the member nations by 2011. Whilst the original June 2011 deadline has not been met, subsequent G20 meetings in 2012 and 2013 reaffirmed the commitment to achieve convergence of accounting standards.
Current status of the project
The scope of the overall IASB-FASB convergence project has evolved over time. The tables below reflect the current situation with the various projects. Some of the projects listed are joint IASB-FASB projects that are not officially part of the Memorandum of Understanding (MoU) between the two boards, but where the boards had nonetheless agreed to work jointly on the project.
Full details of progress on each project can be found on the individual project page for that topic. In a number of cases, the projects have been discontinued as joint projects and the IASB is continuing the projects in its own right, or the topic will be considered for a longer-term IASB research project.
Short-term convergence projects
|Borrowing costs||IASB reissued IAS 23 Borrowing Costs in 2008|
|Discontinued operations (IASB only)||The IASB issued IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations in March 2004|
|Fair value option for financial instruments (FASB only)||Completed|
|Government grants||Joint work on this project has been discontinued|
|Impairment||Joint work on this project has been discontinued|
|Income taxes||Joint work on this project has been discontinued|
|Investment properties||The FASB is actively working on this project|
|Joint arrangements||IASB issued IFRS 11 Joint Arrangements in 2011|
|Research and development (FASB only)||Completed|
|Segment reporting||IASB issued IFRS 8 Operating Segments in 2008|
|Subsequent events (FASB only)|
Major joint projects
|Business combinations||Converged standards issued in 2008|
|Conceptual Framework||This project has been partially completed. Work on further phases was discontinued and the IASB undertook an IASB-only comprehensive project|
|Consolidation||Converged standards issued in 2011|
|Derecognition||The IASB and FASB could not reach a converged solution and instead additional disclosures were implemented.|
|Fair value measurement||Converged standards issued in 2011|
|Financial instruments||This is a high-priority project of both boards and work is currently under way. This project compromises a number of projects, some completed and some under way. In some areas, divergent outcomes have been developed|
|Financial statement presentation||Joint work on this comprehensive project has been discontinued. Some amendments to existing requirements have been made in relation to the presentation of the statement of comprehensive income|
|Insurance contracts||Joint work on this overall project has been discontinued, although the IASB and FASB continue to liaise on some issues|
|Intangible assets||The IASB and FASB decided in 2007 not to add this project to their joint agenda|
|Leases||This is a high-priority project of both boards and work is currently under way|
|Liabilities and equity||Joint work on this project has been discontinued|
|Post-employment benefits||Joint work on this project has been discontinued|
|Revenue recognition||This is a high-priority project of both boards and work is currently under way|
The table below reflect key milestones in relation to the overall convergence project. For details of project milestones for each individual topic which is part of the convergence process, refer to the individual project pages.
|29 October 2002||IASB and FASB enter into a Memorandum of Understanding on convergence|
|27 February 2006||IASB and FASB update and reissue Memorandum of Understanding (MoU)|
|11 September 2008||IASB and FASB update 2006 Memorandum of Understanding (MoU)||Set the goal of completing the major joint projects by 2011|
|2 April 2009||G20 Leaders Declaration on Strengthening the Financial System published||Contains recommendations for dealing with various financial accounting issues|
|28 September 2009||G20 Leaders Final Statement set goal to complete convergence of accounting standards across the G20 member nations by June 2011|
|5 November 2009||Joint IASB-FASB statement reaffirming commitment to convergence||Includes a 'pathway to completion' of major projects by 2011|
|19 October 2010||Request for Views on Effective Dates and Transition Methods published||Comment deadline 31 January 2011|
|21 April 2011||IASB-FASB progress report on convergence||Timetable for completion of convergence projects moved to the end of 2011|
|4 November 2011||G20 Leaders Cannes Summit Final Declaration calls for completion of convergence project||G20 requests a progress report in April 2012|