The Financial Accounting Standards Board will soon issue final standards on fair value measurement and the statement of comprehensive income, with delivery expected early in the second quarter, says Chairman Leslie Seidman.
The fair value measurement standard produces more significant change for International Financial Reporting Standards than for U.S. Generally Accepted Accounting Principles, says Seidman. The United States made a significant overhaul in fair value measurement when it issued Financial Accounting Statement No. 157 Fair Value Measurement in 2006. The new standard will not require any new uses of fair value but it produces some clarity and consistency in how it is measured across U.S. and international rules.
On the other hand, for the statement of comprehensive income, the changes are more significant for GAAP than for IFRS, she says. “It eliminates what is the most predominant practice that is allowed in the U.S. today, which is currently to present these items as part of the statement of changes in shareholder equity,” Seidman says.
Beyond those standards, it's crunch time at the Financial Accounting Standards Board as the mid-2011 target date approaches for the board's highest priority projects to dramatically overhaul U.S. accounting standards for financial instruments, leasing and revenue recognition. The board is making “excellent progress” in the eyes of Chairman Leslie Seidman, who recently provided an update on the efforts at a U.S. Chamber of Commerce event in Washington. The board is rethinking various aspects of all the proposals after digesting comment letters and other feedback, she said. “Rare is the issue we will not be redeliberating as part of this process,” she added. “That's not to say we're starting with a clean sheet of paper.”
The board is working feverishly with the International Accounting Standards Board to issue final standards for financial instruments, leasing, and revenue recognition by mid-2011 to converge U.S. and international rules as a number of countries adopt international rules in 2011. In addition to the core priority projects, FASB and IASB are finalizing another package of rules on the convergence radar – those on fair value measurement and the statement of comprehensive income. “We are very close to issuing final standards early in the second quarter,” Seidman says.
The boards have significantly stepped up their meeting schedule to meet the mid-2011 convergence target date, Seidman said. For March alone, the FASB has 12 to 15 days mostly consumed by meetings either jointly with the IASB or with FASB only, she said. Previously, it was typical for FASB to hold one board meeting a week and one joint meeting a month with the IASB, “operating at what I would now call a leisurely pace,” she says.
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