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US & Int accountants to align standards

Monday 30 January 2012 – by Andrew Hickley

US and international accounting regulators have agreed to look into reducing the differences between their respective classification and measurement models for financial instruments.

The US Financial Accounting Standards Board and the International Accounting Standards Board said on Friday that they will jointly look at ways to align the key aspects of their models as part of separate reviews into their standards.

The IASB will consider aligning its standards as part of a “limited-scope” review of IFRS 9, while the FASB will consider changes as part of its ongoing re-deliberation of its own financial instruments standard, which was issued in May 2010.

FASB chairman Leslie Seidman admitted that the classification and measurement standards represented the “most significant remaining differences between the board reached to date”.

However, the boards said that the reviews would be conducted before deciding if changes will be made to their standards.

The IASB is already reviewing measures in IFRS 9 after it emerged that changes with its insurance contracts standard, IFRS 4, had a number of interaction problems.

In a statement, IASB chairman Hans Hoogervorst said: “When IFRS 9 was introduced in 2009 we said that further amendments might be required once the direction of travel on insurance contracts became clear. We are now at that point.

“At the same time, this limited-scope review now presents an ideal opportunity to align IFRS and US GAAP more closely, in this important area of financial reporting.

“We will proceed with caution, recognising the investment that many jurisdictions have made in preparing for the introduction of IFRS 9 in 2015.”

Seidman added: “The boards will share the feedback they have received on their respective decisions and strive to develop a more closely converged approach that addresses those concerns.”

Speaking in Australia at the end of last year, Hoogervorst appeared to admit defeat over the boards being able to find a workable solution for both standards. The Dutchman said that the pair had “ended up in different places”, instead pointing to increased disclosures as a method to help comparability between the standards.

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