The International Accounting Standards Board and the U.S. Financial Accounting Standards Board have agreed to push through a review of their rules on accounting for financial instruments.
Both boards said they would release proposals to replace their existing rules in this area with a common standard “in a matter of months, not years,” after a meeting in London. Critics have blamed the current accounting standards for worsening the financial crisis.
IASB Chairman Sir David Tweedie said a common standard on financial instruments would “significantly improve financial reporting and lead to a less complex approach.” Converging the standard setters’ existing approaches in this area would be difficult, Tweedie said, but “the remit we have from policymakers is clear.”
The two boards also discussed joint projects on off-balance-sheet activity, consolidation, financial statement presentation, fair-value measurement, and the conceptual framework of financial reporting.
Tweedie added: “The G20 and other international bodies have called for standard setters to seek global solutions to a global crisis. This is not always easy to achieve and there may be areas where, because of the extent of existing guidance, the two boards find it difficult to reconcile differences in the existing standards in the immediate term.”
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