International Accounting Standards Board
(IASB) chair David Tweedie has acknowledged the IASB is least
likely to achieve convergence with the US Financial Accounting
Standards Board (FASB) in its memorandum of understanding (MoU)
project on financial instruments.

The convergence MoU, first signed in 2006,
covers a series of major projects including:

  • Financial Instruments;
  • Consolidations;
  • Derecognition;
  • Fair value measurement;
  • Revenue recognition; and
  • Leases.

The aim is to achieve converged standards by
mid-2011. This has been backed by the G20.

The IASB and FASB reaffirmed their commitment
to the goal in November last year, saying they would meet monthly
to achieve the deadline.

Unofficial notes taken by Deloitte staff at a
meeting of the trustees of the International Accounting Standards
Committee (IASC) Foundation this week say Tweedie has conceded
financial instruments is the project on which convergence will
‘most likely’ not be achieved.

The IASB’s financial instruments standard,
IFRS 9, uses a mixed measurement model, with fair value measurement
and amortised cost used in different situations.

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The FASB seems set on a full fair value
measurement model, which would not be accepted by Europe.

However, Deloitte’s notes, published on the
IAS Plus website, quote one US trustee as saying it is far from
clear the FASB’s ‘full fair value on the balance sheet’ approach
would be accepted.

He noted that for debt instruments in
particular, the amortised cost approach was seen as the better,
more useful measure.