U.S. Losing Most Favored Nation Status with International Accounting Standards
The International Accounting Standards Board is headed toward a more multilateral approach in the formation of International Financial Reporting Standards, as the U.S. appears increasingly unlikely to throw its support behind IFRS this year.
For the past decade, the IASB and the Financial Accounting Standards Board in the U.S. have been carrying on talks to converge IFRS with U.S. GAAP. Despite progress in producing a number of converged standards, they have been unable to complete work on several of their top-priority projects of recent years, including financial instruments, leasing and insurance contracts.
At their most recent joint meeting last week, new fissures emerged between the two boards over the impairment standards for loan losses in the financial instruments project (see FASB Splits with IASB on Impairment Standards). IASB chairman Hans Hoogervorst voiced his frustration at signs of the disagreement only a month after the two boards finally found common ground on how to treat loan losses.