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FASB Chairman reflects on collaboration with IASB

  • FASB (US Financial Accounting Standards Board) (lt blue) Image

May 02, 2019

On May 2, 2019, at a financial reporting conference at Baruch College in New York City, Financial Accounting Standards Board (FASB) Chairman Russell Golden discussed the challenges of "bilateral convergence" between IFRS and US GAAP, what the Boards have accomplished together, and how the Boards will work together in the future.

Mr. Golden began his speech by acknowledging that comparable global accounting standards help reduce complexity and costs in financial reporting. He stated, however, that “by 2013, [the FASB had] come to realize that the ideal of single set high-quality global accounting standards was just that—an ideal. Different starting points, different cultures, and different legal systems made bilateral convergence impossible to achieve.”

After he highlighted the success of the joint FASB-IASB projects on business combinations, non-controlling interests, fair value measurements, borrowing costs, segment reporting, stock compensation, and non-monetary exchanges, Mr. Golden reflected on the diverging strategies for the Boards’ projects on revenue recognition, leases, credit losses, and insurance. He closely examined the reasons for divergence, which were usually due to cost and complexity for US stakeholders.

Mr. Golden discussed how the FASB is working to “[forge] a new model for how we support the goal of more comparable, high-quality accounting standards worldwide,” which includes:

  • Development of high-quality GAAP — Mr. Golden noted that considering opportunities to align with IFRS when possible is "embedded" in the FASB’s process. He said the FASB is in "constant contact" with the IASB about the IASB’s projects and that the Boards share research activities to “continue progress toward improved, aligned solutions.”
  • Active participation in the Accounting Standards Advisory Forum (ASAF) — Mr. Golden described the FASB’s commitment to the ASAF, which advises the IASB as it develops IFRS. He called the FASB’s involvement “an important opportunity to represent U.S. interests in the IASB’s standard-setting process” and noted that the ASAF provides a “valuable opportunity to work together with other standard setters on issues of common interest.”
  • Enhancing relationships with other national standard setters — Mr. Golden mentioned that the FASB meets individually with standard setters from many countries to “exchange ideas on improving our respective standards. This process also helped promote the broader flow of information and ideas that mutually inform our thinking. And to contribute to an environment that will foster greater alignment of standards across the globe.”

He made clear in his speech that the FASB will continue to work closely with the IASB to improve accounting standards worldwide. He also briefly provided his own opinion on sustainability reporting:

I think we should follow the IASB’s lead and remain focused on improving the financial statement. And leave sustainability reporting and other performance metrics—however important they may be—to other experts.

Review the full speech on the FASB's website.

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