Accounting rule makers are officially cutting themselves some slack in meeting their original June 2011 target date to finalize some key standards that would eliminate big differences in U.S. and international rules.

The Financial Accounting Standards Board and the International Accounting Standards Board are resetting their target date to the end of 2011 to complete some major changes to the standards for financial instruments, revenue recognition, leases, and insurance. In a joint podcast, FASB Chairman Leslie Seidman said the two boards will lay out a new plan to complete the remaining projects necessary to substantially converge U.S. Generally Accepted Accounting Principles with International Financial Reporting Standards. The boards expect to publish a revised work plan in a matter of days.

Seidman and her counterpart, IASB Chairman David Tweedie, said the June 2011 target date was not a firm deadline, despite prodding from the Group of Twenty Nations to make improvements that were deemed important coming out of economic crisis. The boards also were looking to finish the major standards in mid 2011 to accommodate a large batch of countries that are adopting IFRS but didn't want to implement them as the platform was shifting.

Perhaps most critical in the United States, the Securities and Exchange Commission has said progress on convergence is a key criteria in any decision it might reach on eventually adopting IFRS for use in the United States. SEC Chief Accountant James Kroeker offered no specific comment on how the boards' plan to extend their time line for completing the major projects will impact the SEC's decision-making on adopting IFRS. “The announcement is an important reminder that the quality of the standards is and must remain the top priority for the Boards as they seek convergence,” Kroeker said in a written statement. “High quality standards are critical to our evaluation as SEC staff continues with the work plan efforts.”

The original June target “actually gave both boards great focus,” said Tweedie. “We are probably further ahead than we would have been had we not had that focus.” Seidman and Tweedie both emphasized it's more important for the boards to issue quality standards than to rush them out ahead of a target date.

The boards have conducted numerous roundtables and sorted through hundreds of comment letters on their proposals to revise the accounting for financial instruments, revenue recognition, and leasing in particular. The boards have worked through some tentative conclusions on how they will revise their proposals, but need more time to continue working through issues and to check back with constituents before making final decisions.

The boards also need more time to consider an adoption or implementation plan. “We do want to reassure people that we will allow ample time for them to understand the requirements and to plan for an effective transition to the new standards once those decisions are made,” Seidman said.

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