International accounting standards convergence has taken another small step forward with the FASB's announcement on Tuesday of a request for input on the timing of new accounting and reporting standards.
Comments on the board's discussion paper on convergence timing must be in by January 31 next year, although comments on certain sections of the current convergence plan must be in sooner than that.
Acting FASB Chairman Leslie Seidman noted: “Our joint work plan supporting the Memorandum of Understanding with the IASB identifies targeted completion dates for various projects, but does not address when the standards would be effective."
"We issued this Discussion Paper to gather the information we need to create a realistic, cost-effective plan for transitioning to the new standards,” Seidman added.
The FASB is looking for input on the amount of time needed not only to come to grips with the new standards, but also to manage the transition in a way that will work for companies from a cost and resource perspective. It queries, for example, whether standards should be effected all together or over a number of years.
As the discussion paper notes, new standards are coming in at a time of ongoing regulatory change and continuing economic uncertainty, and at the same time the standards-setting structure in the US is under review.
The paper explains: “The Securities and Exchange Commission is evaluating whether and how to incorporate International Financial Reporting Standards (IFRSs) into the US reporting system and the Financial Accounting Foundation (Foundation) is reviewing standards-setting for private entities. Given these and other factors, the Board recognizes the need to help stakeholders manage the pace and cost of changes to financial reporting.”
It also notes that this discussion paper, the IASB’s Request for Views, are both intended to recognize the unique needs of US users of financial statements, and those of private entities as well. As such, both the IASB’s and the FASB’s comment requests include environment-specific questions to get at just that. For example, the FASB paper asks respondents not just about time and costs involved in moving to new standards, but also the expected impact on the broader financial reporting system as a result of new standards.
For those companies who have been closely watching international accounting standards convergence process and who are concerned about the impact it will have on their reporting, getting your $0.02 in is a good idea. Here is the link to the discussion paper: