Basel chair: IASB/FASB must cooperate
Tuesday 5 April 2011 - by Dave Goodman
The Basel Committee on Banking Supervision has called on the world's two biggest accounting standards boards to continue to cooperate in order to ensure a single set of global accounting standards.
He added: "The Committee supports the common solution proposed by the IASB and FASB in the ED - it will improve the decision usefulness and relevance of financial reporting for users, including prudential regulators.
"We strongly encourage both the IASB and FASB to make similar progress with other aspects of accounting for financial instruments as this would ensure a level playing field across the globe."
However, Wellink also noted that the Committee's reaction to the Impairment supplement was not entirely positive, as they felt it was too focused on open portfolios and did not allow for the build up of adequate levels of provisions on the balance sheet to absorb all credit losses.
He wrote: "The original IASB ED on impairment emphasised the Income Statement as it looked to reflect the economic reality of lending by recognising interest revenue as a credit cost adjusted return (or yield), which eliminated the front-loading of interest revenue in closed portfolios.
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