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Standard-setters recently reshuffled their priority list for accounting convergence. Here's the new schedule.
Sarah Johnson, CFO.com | US
July 13, 2010
When U.S. and international accounting standard-setters reprioritized their pending joint projects last month, they appeared to be backtracking on their self-imposed deadline to finish their convergence project by June 2011, a pledge they had recommitted themselves to as recently as last fall. But Financial Accounting Standards Board member Thomas Linsmeier chafes at the word deadline. During a FASB Webcast two weeks ago, he used more-flexible terminology: "target completion dates."
However you want to label the new schedule, the fact is that rulemakers will still be releasing a slew of major accounting changes in the near future, creating real, looming deadlines for the finance executives who will have to absorb the new rules into their financial-reporting systems. Below is a timeline of the dates that are known, such as deadlines for commenting on some of the proposals. Other dates — such as when all these rules have to be implemented — are still up in the air. The standard-setters plan to ask for feedback on that issue by the end of September.
The changes to some of the dates were prompted by complaints that FASB and the International Accounting Standards Board were overly ambitious in their convergence work, which has been under way for nearly a decade. The boards have saved the hardest projects for last, which critics argue leaves the boards' constituents little time to offer thoughtful analysis. The rulemakers have responded with a promise that they will issue no more than four "significant or complex" drafts for review during any one quarter.
Still, their "most urgent" projects are scheduled to be done by June 2011, and will put a burden on both them and those that have to implement their work. "Finalizing these standards will require significant effort and focused intensity by both us and our stakeholders," FASB and the IASB noted in their most recent progress report.
Those who want to influence the final outcome of the new rules can begin doing so this summer, as the rulemakers will have released four major projects for review by August. Proposed changes to accounting for financial instruments, revenue, and fair-value measurements have recently been issued, and a proposal for leases is forthcoming.