The US Financial Accounting Standards Board
(FASB) has confirmed fears that its draft financial instruments
standard would take a drastically different approach to its IFRS
counterpart.
Under the FASB’s financial instruments
exposure draft, most financial assets would be measured using fair
value. This is in contrast to the International Accounting
Standards Board’s (IASB) IFRS 9, where more amortised cost is
required.
The FASB said its proposals will bring more
transparency to financial statements.
But it represents a significant blow to the
IASB and FASB’s goal of converging IFRS and US GAAP, a project that
has the backing of the G20.
The American Bankers Association has already
criticised the proposal, saying it would greatly undermine the
availability of credit by making it difficult to make many
long-term loans.
The IASB and FASB have said they will continue
to work towards converged standards, by both considering responses
to the FASB consultation.
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