The Financial Accounting Standards Board may give financial statement preparers and users another chance to review and comment on revised drafts for some major changes in accounting standards before the new rules are adopted—but the board is not sure yet.

FASB and the International Accounting Standards Board published a 12-page update to their ongoing “memorandum of understanding” to eliminate key differences in U.S. and international accounting rules following their recent concession that the process is taking longer than they hoped. “Taking a look at the remaining decisions to be made, and our desire to cross check with stakeholders on any key changes that we are making, we concluded that it was going to take a few more months for us to complete our work,” said FASB Chairman Leslie Seidman in a podcast. “We think those changes are necessary to satisfy ourselves that the resulting standards are of high quality.”

The boards originally targeted June 2011 to complete the highest priority projects—revenue recognition, leasing, financial instruments, and insurance—but now expect those projects to stretch into the end of 2011. And for FASB, a new standard on insurance contracts isn't likely to be completed until 2012.

For U.S. companies following U.S. Generally Accepted Accounting Principles, the latest plan calls for the key board decisions on revenue recognition and leasing to completed by the end of June, including decisions on when and how they would take effect. Then FASB will decide whether to formally issue revised drafts for public comment, or whether to post them on the Website to give preparers and users a sneak preview of the pending standards.

Whether it chooses a formal or informal re-exposure and comment process, FASB says it will perform some further outreach and fatal flaw reviews on the revised standards before adopting them. “Based on that feedback, we will then decide how to proceed,” said Seidman. “Can we move to a final standard? Do we have additional work to do?”

The financial instruments project is more fragmented, with FASB and IASB approaching new standards in different ways. FASB says it will finalize its discussions on how companies should classify and measure financial instruments—with no hint that it will change its latest views on when and how companies would use fair value vs. historical or amortized cost—in the third quarter of 2010. “At that point, we'll have to evaluate whether we need to re-expose our conclusions,” Seidman said.

FASB expects “in the next couple of months,” said Seidman, to finalize its thinking on how to revise existing rules on impairments of financial assets, or when and how companies should be required to write down asset values. “While there was no clear consensus in the comments, we received many helpful suggestions,” she said. After reaching final decisions, the board will determine whether it needs to re-expose the final rules for a new round of comments. As for hedging, Seidman said if the board decides to make major changes to its original standard, it would re-expose them for comments.

Finally, FASB expects to issue some clarifications on fair-value measurements in “the new few weeks,” said Seidman, but she doesn't expect them to result in major changes in U.S. practice. FASB will also soon issue an amendment on how to present other comprehensive income—“a big change for U.S. companies because they'll no longer be able to present other comprehensive income either as part of the statement of changes in stockholders' equity,” she said.

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