EFRAG urges IASB and FASB to agree on a joint timetable for finalising a converged financial instruments standard

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

08 Mar, 2011

The European Financial Reporting Advisory Group (EFRAG) has sent a joint letter to both the IASB and the FASB in which it calls on the two bodies to concentrate on agreeing a timetable for producing a finalised converged financial instruments standard.

EFRAG says that: 'Reaching agreement on a converged financial instruments standard appears again to be a realistic goal that IASB and FASB can achieve jointly. While it may not be possible to finalise hedge accounting requirements before the end of 2011, agreement on the classification and measurement, impairment and offsetting requirements before the end of 2011 is certainly an achievable and valuable goal'.

It says that recent efforts by the FASB show 'strong signs of the FASB's willingness to work actively towards a converged standard for the accounting for financial instruments'. Then it points out that: 'In the meantime, IASB has not yet defined possible requirements for portfolio hedge accounting, consistent with the objective set for hedge accounting to reflect hedging strategies implemented following an entity's risk management. In its comment letter on the IASB Exposure Draft Hedge Accounting, EFRAG expects to express the view that the IASB should not finalise a standard on the general hedge accounting model, before developing a model for portfolio hedging'.

It concludes by saying that: 'We urge the two Boards to continue their joint efforts to develop a converged high-quality financial instruments standard – with careful consideration of EFRAG's recommendations to that purpose — and agree on a new joint timeline for the finalisation of such standard, consistently with the G20 requirements'.

Please click for EFRAG press release (link to EFRAG website) and the letter (PDF 89k).

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