Wednesday, May 18, 2011

Doubts on Convergence Objectives

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Accounting professionals interviewed by BNA raised serious questions about whether the FASB and IASB ought to be knocking themselves out trying to converge major standards on financial instruments, revenue recognition, and leasing by their self-imposed June 30, 2011, deadline.

For example, Robert Uhl, director of accounting standards and communication at Deloitte & Touche LLP, acknowledged the benefits of finalizing standards "before a number of countries adopt IFRS and before there is significant turnover in board members at the IASB."

"However, those benefits have little value if the standards that are accelerated are not of the highest quality or done on a piecemeal basis," Uhl said.

Uhl's opinion was shared by others interviewed by BNA for the 2010 outlook on key accounting issues published in the Jan. 22 issue of  Accounting Policy & Practice Report  (click link for subscription information, or to take a free 15-day trial).

When asked if FASB and IASB can achieve their convergence work on the specified time frame, former FASB member Ed Trott said, "they can do it by reducing the scope and quality of the standards that they issue."  While that might be the tendency overall, Trott said he thinks that FASB at some point would bow out of such an effort.

Other topics addressed by the professionals interviewed included the impact of FASB's new consolidation, and securitization rules, and a trend toward ever more complicated financial reporting.

---Susan Webster, managing editor, Accounting Policy & Practice Report

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