Accounting rulesetters to reopen bank asset rule
By Huw Jones
LONDON Jan 27 (Reuters) - Two top accounting rulesetters will try again to reach a common global method for banks to classify and measure assets so that investors can easily compare financial statements.
The International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) held joint board meetings this week under pressure from world leaders to create a single set of global accounting rules.
Both boards had pursued radically different approaches to measuring bank assets, which would make it harder for investors to compare earnings of lenders in the United States with those in over 100 countries that apply IASB rules.
"Today's 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 U.S. and abroad," FASB Chairman Leslie Seidman said in a statement.
The IASB's rule uses two categories: pricing assets like a simple loan at amortised cost, and pricing complex assets like derivatives at the going market rate or fair value.
FASB had wanted fair value for all assets but faced opposition from some banks and has since suggested a three-category approach.
Following the shift in the U.S. position, the two boards agreed on Friday to reopen negotiations on classifying and measuring assets in a bid to reach a common approach.
Some countries in Asia have already begun to prepare for the IASB's new measurement rule.
"We will proceed with caution, recognising that investment that many jurisdictions have made in preparing for the introduction of IFRS 9 in 2015," IASB Chairman Hans Hoogervorst said.
The two boards will also work on a common approach to booking losses on loans earlier.
As part of their project on accounting for financial instruments, the FASB is proposing enhanced disclosures about interest rate risk and liquidity, which are already covered under an IASB rule, the two boards said.
The IASB hopes further progress in "converging" or aligning its rules with those of FASB will finally persuade the United States to switch to using IASB rules.
(Editing by David Cowell)
((firstname.lastname@example.org)(+44 207 542 3326)(Reuters Messaging: email@example.com)) Keywords: ACCOUNTING/
(C) Reuters 2011 All rights reserved. Republication or redistribution of Reuters content, including by caching, framing, or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
- Tweet this
- Share this
- Digg this