International and US standard setters have
begun the process of reducing the differences in their
classification and measurement models for IFRS 9 to more closely
align US GAAP with IFRS.

The discussions between International
Accounting Standard Board (IASB) and the US Financial Accounting
Standard Board (FASB) is part of the project undertaking
limited-scope changes to IFRS 9 with the aim to develop a new IFRS
on insurance contracts.

“When IFRS 9 was introduced in 2009 we said
that further amendments might be required once the direction of
travel on insurance contracts became clear. We are now at that
point. At the same time, this limited-scope review now presents an
ideal opportunity to align IFRS and US GAAP more closely, in this
important area of financial reporting.’ IASB chairman Hans
Hoogervorst said.

FASB chairman Leslie Seidman said the boards
have been urged to converge their standards on financial

“The decision to work together on key
differences, which represent the most significant remaining
differences between the decisions reached to date, is responsive to
stakeholders in the US and abroad,” Seidman explained.

The boards will explore key aspects of their
respective models and then decide whether to issue proposed
amendments to IFRS 9 and US GAAP.