CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. FAF Sets Out Convergence Agenda

FAF Sets Out Convergence Agenda

by Glen Shapiro,, New York

17 November 2011

The Financial Accounting Foundation (FAF), which oversees the United States accounting standards setter the Financial Accounting Standards Board (FASB), has generally backed the Securities and Exchange Commission's (SEC) proposed approach to converging United States Generally-Accepted Accounting Principles (US GAAP) with International Financial Reporting Standards (IFRS).

In a letter, the FAF said that it supports the incorporation of IFRS into US GAAP but urged that in order for the United States to maintain robust standards in the meantime this must continue to be achieved over an extended transition period to allow the US to retain sovereign authority over financial reporting and standard setting for US capital markets, with influential roles for the SEC and FASB intact.

“The trustees believe that the SEC’s staff paper of May 26 represents a sound path forward in moving the United States to a set of high-quality, globally comparable, international accounting standards. That said, we are recommending several important enhancements that we believe will improve the processes outlined in the SEC staff paper,” the FAF wrote.

Under the proposed approach, “the trustees’ recommendations would entrust to the IASB (International Accounting Standards Board) the primary role of creating new accounting standards applicable to the US capital markets, while the SEC and the Financial Accounting Standards Board remain active participants in the creation of those standards and the final arbiters of US GAAP”.

In the medium-term, the FAF said that it anticipated that as negotiations continue, US and international standards are to become largely 'comparable, if not identical'.

Summarising, the FAF said: “The US would look to the IASB to set those new standards with active involvement by the FASB. In addition, the FASB would develop a process to address substantial differences that remain between US GAAP and IFRS. The Trustees view this approach as a significant but measured change in the way the FASB participates in the global accounting standard-setting process.”

TAGS: generally accepted accounting principles (GAAP) | tax | business | law | accounting | capital markets | international financial reporting standards (IFRS) | United States | financial reporting | Financial Accounting Standards Board (FASB) | standards

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »