Accounting boards further harmonise standards

The two boards responsible for US and international accounting standards have stripped away major differences in areas such as fair value reporting and consolidated financial statements, with guidance expected in the coming weeks.

In their latest progress report, the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) said they had completed convergence work on how firms estimated fair value or reported consolidated financial statements, among other areas. 

Formal guidance on their work is expected in the coming weeks.

In their quest to harmonise US and international accounting standards, the two boards have wrapped up five projects since their last progress report in November. However, three of the projects (revenue recognition, leasing and financial instruments) need further work, the boards said. 

The boards extended the June target date for full convergence into the second half of the year— saying some projects required further consultation with those affected by the proposed changes.

The news comes at a time the SEC said it would sponsor a roundtable in July to discuss the pros and cons of potentially adopting the International Financial Reporting Standards (IFRS) as the financial reporting system for US issuers. The agency is expected to make a decision on the matter before the end of the year, assuming full convergence work is completed by the two boards by then.

More than three quarters (80 percent) of companies believe the IFRS will be adopted at some point, according to a 2011 PricewaterhouseCoopers survey.