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IASB-FASB convergence

Background

The objective of this project is to eliminate a variety of differences between IFRSs and U.S. GAAP. The project, which is being done jointly by the FASB and IASB, grew out of an agreement reached by the two boards in October 2002 (the "Norwalk Agreement").

The IASB-FASB convergence project is of particular importance:

  • The SEC is currently considering whether to adopt, or allow, IFRSs for use by domestic issuers in the United States, and it is giving consideration to the success of the convergence process as part of this assessment. A decision was expected to be made in 2011 or in 2012.
  • 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. While the original June 2011 deadline has not been met, subsequent G20 meetings have reaffirmed the commitment to achieve convergence of accounting standards.

 

Current status of the project

The scope of the overall IASB-FASB convergence project has emerged over time. The tables below reflect the current situation of 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 they are projects that the boards have nonetheless agreed to work on jointly.

Full details of progress on each project can be found on the individual project page for that topic.

The IASB and FASB also undertook a consultation on the effective dates of any pronouncements arising out of the various projects and subsequently considered the constituent views expressed when setting the effective dates for various projects.

Short-term convergence projects

ProjectStatus
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 Work on this project has been deferred.
Impairment Work on this project has been deferred.
Income taxes This project is currently on hold.
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

ProjectStatus
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 comprises a number of projects, some completed and some under way.
Financial statement presentation The comprehensive project is currently on hold. Some amendments to existing requirements have been made in relation to the presentation of the statement of comprehensive income.
Insurance contracts This is a high-priority project of both boards and work is currently under way.
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 This project is currently on hold.
Postemployment benefits Work on the comprehensive project has been deferred.
Revenue recognition This is a high-priority project of both boards and work is currently under way.

Project milestones

The table below reflects key milestones in relation to the overall convergence project. For details of project milestones for each individual topic that is part of the convergence process, refer to the individual project pages.

DateDevelopmentComments
October 29, 2002 IASB and FASB enter into a Memorandum of Understanding (MoU) on convergence.
February 27, 2006 IASB and FASB update and reissue MoU.
September 11, 2008 IASB and FASB update 2006 MoU. Set the goal of completing the major joint projects by 2011.
April 2, 2009 G20 Leaders Declaration on Strengthening the Financial System published. Contains recommendations for dealing with various financial accounting issues.
September 28, 2009 G20 Leaders Final Statement set goal to complete convergence of accounting standards across the G20 member nations by June 2011.
November 5, 2009 Joint IASB-FASB statement reaffirming commitment to convergence. Includes a "pathway to completion" of major projects by 2011.
October 19, 2010 Request for Views on Effective Dates and Transition Methods published. Comment deadline January 31, 2011.
April 21, 2011 IASB-FASB progress report on convergence. Timetable for completion of convergence projects moved to the end of 2011.
November 4, 2011 G20 Leaders Cannes Summit Final Declaration calls for completion of convergence project. G20 requests a progress report in April 2012.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.