Today the FASB and IASB met to consider how to proceed in the financial instruments with characteristics of equity (FICE) project and to discuss suggestions to use a targeted-improvements approach in the areas of fixed-for-fixed guidance, convertible debt, and redeemable and puttable instruments.

Most board members expressed their concerns about timing of the project in light of the convergence priorities (mainly to finish the four big projects: revenue, leases, financial instruments, and insurance contracts) by June 2011. They noted that given these priorities, the FICE project should be deferred.

One board member stated that the boards should first agree on classification and measurement of basic financial liabilities before proceeding to hybrid instruments. Furthermore, several board members questioned the usefulness of the targeted-improvements approach. They noted that convergence related to fixed-for-fixed guidance, convertible debt, and redeemable and puttable instruments would require significant time to achieve and would not lead to full convergence in debt and equity classification because of the divergent nature of other guidance in this area. In addition, some board members questioned whether the project was useful given that the boards had not yet addressed what constitutes equity on a conceptual level.

As a result of all these concerns, the boards decided to remove the FICE project from their active agenda for the time being.