G20 leaders have delayed the completion
deadline of the IFRS and US GAAP convergence project until the end
of 2011, following a standard setters’ plead for more time.

In endorsing a single set of international
accounting rules, world leaders made little reference to the
previous June 2011 deadlines, seeming easing the pressure on
standard setters to complete the project by that date.

The deadline is particularly important because
a number of major economies are due to adopt IFRS in 2011 and 2012
and it would be ideal for them to have a stable base of standards
to start on. It is also significant because the world’s two largest
economies, the US and Japan, are considering the continued
improvement and convergence as they decide whether to adopt

But in recent months financial reporting
stakeholders have become increasingly concerned they would not have
enough time to comment on the unprecedented number of exposure
drafts the IASB and FASB would need to release in the next three
months to meet the deadline.

Modified convergence

The boards have responded by modifying their
work plan so no more than four significant exposure drafts are
issued in any one quarter.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In a letter to the G20 ahead of their meeting
in Canada in late June, the boards said they have retained targeted
completion dates of June 2011 or earlier for projects where the
need for improvement to IFRS and US GAAP are most urgent.

They said they have also identified the
projects where a later completion date would be appropriate because
they address matters that are of a lower priority or where further
research and analysis is necessary.

The one notable feature of a progress report
that explains the modified plan to the G20 is the absence of a
commitment to achieve a converged financial instruments

The two boards are currently considering very
different proposals for financial instruments accounting and if
they cannot come to the same conclusion, may have to develop
reconciliation requirements.

Revised work plan

The following milestones have been set for the
major convergence projects:

  • Consolidation: exposure draft in Q4, 2010;
    converged standard in Q2 2011;
  • Derecognition: The IASB will finalise
    improved disclosure requirements that are similar to recently
    amended US GAAP requirements.
  • Balance Sheet Netting of Derivatives and
    Other Financial Instruments: exposure draft in Q4 2010; converged
    standard in Q2 2011;
  • Financial instruments: IASB hedge accounting
    exposure draft in Q3 2010; converged standards in Q2 2011;
  • Financial statement presentation –
    presentation of other comprehensive income: converged standard in
    Q4 2010;
  • Financial statement presentation – main
    project: exposure draft in Q1 2011; converged standard in Q4
  • Financial statement presentation –
    discontinued operations: exposure draft in Q1 2011; converged
    standard in Q4 2011;
  •  Financial instruments with
    characteristics of equity: exposure draft in Q1 2011; converged
    standard in Q4 2011;
  •  Leases: Exposure draft in Q3 2011;
    converged standard in Q2 2011;
  •  Fair value measurement: exposure draft
    in Q2 2011; converged standard in Q1 2011;
  •  Revenue recognition: exposure draft in
    Q2 2010; converged standard in Q2 2011;
  •   Post employment benefits:
    standard in Q1, 2011