FEI recommendations on IASB-FASB convergence

  • FEI (Financial Executives International) (lt green) Image

19 Feb, 2010

The Committee on Corporate Reporting (CCR) of Financial Executives International (FEI) has sent two letters to both the Financial Accounting Standards Board and the International Accounting Standards Board with recommendations on the boards' projects to converge their standards.

  • One of the Letters (PDF 114k) addresses the effective dates and transition methodology in the major convergence standards. CCR states that the current proposed dates present challenges to realising a high quality implementation. They recommend that the Boards deliberate the effective dates and transition of the major convergence standards as a package, rather than on a standard-by-standard basis, because those standards are interdependent and will have a significant impact on companies. CCR cites Financial Statement Presentation, Leases, Pensions, and reporting cash flow from operations by the direct method as having the greatest impact on accounting information systems. CCR recommends:
    • Adopt a common effective date for the final converged standards that provides a three-year implementation period, allowing for early adoption.
    • Permit preparers as much flexibility as possible in choosing the manner of initial adoption (retroactive restatement, cumulative effect, or prospective).
  • In the Other Letter (PDF 85k), CCR offers to assist the IASB and FASB with the ongoing MoU projects. CCR notes that these projects pose a 'multitude of potential challenges' including the reliability of information requested, the collection of such data in a global organisation, implementation and costs of systems changes in the disparate systems environment that exists in most companies. CCR proposes that FEI member companies provide corporate representatives to work as part of smaller resource groups with FASB and IASB project managers as convergence projects continue to evolve.

Click for FEI Press Release (PDF 14k)


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