The IASB's response to the credit crisis is being made in recognition of the need to clarify International Financial Reporting Standards (IFRS) to address new market developments.

The IASB’s response has primarily focused on the recommendations of the Financial Stability Forum (FSF), which had the support of the Group of Seven (G-7) Finance Ministers. The board is closely monitoring developments in the United States and other jurisdictions to avoid unnecessary inconsistencies in accounting treatments under IFRS and US generally accepted accounting principles (GAAP).

The IASB announced that it will work closely with the FASB to develop a common approach to issues related to the valuation of financial assets and liabilities resulting from purchases made through the US Emergency Economic Stabilization Act of 2008 and any other similar programmes internationally, if and when these programmes are initiated.

The IASB is, in addition, assessing any inconsistencies in how IAS39, which attempts to establish principles for recognising and measuring financial assets and financial liabilities, and US GAAP practice. The IASB intends to discuss these matters and will decide its position as part of its public meeting during the week of October 13-17.

At that meeting the IASB will assess the suitability of adopting the US GAAP approach and whether adapting IFRS will provide relevant information to users of financial statements. The IASB will also consider the potential need to counteract abuse resulting from the ability to reclassify financial instruments and related areas of accounting to ensure consistency between practice in the United States and in those jurisdictions using IFRS.

The IASB also said that it is willing to assist in any study that examines the quality of existing fair value information provided to investors and any impact of financial reporting on the credit crisis.