On 2 June 2010, the International Accounting Standards Board (IASB) and U.S. Financial Accounting Standards Board (FASB) (collectively “the Boards”) announced a modified strategy for the convergence of IFRS and U.S. GAAP.

This comes at a time of unprecedented standard-setting activity. The Boards first entered into a Memorandum of Understanding (MoU) in 2006, which was updated in 2008. The MoU’s objective is to improve and converge many of the Boards’ respective accounting standards. A very aggressive work plan was established that contemplated the completion of the MoU projects by June 2011. The IASB also added many non-MoU projects to its agenda as an integral part of its overall work plan.

The G20 leaders have repeatedly endorsed the Boards’ convergence efforts. In 2009, the G20 leaders called on the Boards “to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011.” The Boards responded to the G20 by reaffirming their commitment to improving their standards and intensifying their convergence efforts by meeting jointly and at least on a monthly basis. This increased level of activity would have resulted in issue of a significant number of proposals for comment in a very short period of time.