FASB Moves to Work with More National Standard-Setters

Financial Accounting Standards Board chairman Russell Golden explained how FASB will be working with both the International Accounting Standards Board and other national standard-setters, including China and Germany, as FASB moves past the convergence process.

In an article that appeared in his organization’s FASB Outlook newsletter Monday, Golden described his view of how FASB will balance U.S. GAAP with International Financial Reporting Standards, which FASB and the IASB have been converging since 2002.

“We at the FASB continue to believe that global accounting standards should be as comparable as possible—and we remain fully committed to the long-term, aspirational goal of developing global accounting standards that have the fewest possible differences,” he said.

However, he pointed out that Securities and Exchange Commission chief accountant James Schnurr recently told a Baruch College accounting conference in May that “there is virtually no support to have the SEC mandate IFRS for all registrants” (see SEC Chief Accountant Backs Away from IFRS Proposal).

Golden discussed how FASB will work with other standard-setters to continue to make global standards more comparable, the focus of a recent European Commission conference in Latvia he attended in June.

“As we move toward the conclusion of our final joint projects, on leases and impairment, I think that it is important for the FASB’s stakeholders to understand how we plan to continue to work with the IASB —and other standard setters—to increase the comparability of global accounting standards,” said Golden.

FASB plans to continue its existing collaborations with other national accounting standard-setters in the United Kingdom, Germany, Canada and Japan, as well as with the IASB. FASB is already part of the Accounting Standards Advisory Forum, a group of leaders of various national and regional standard-setters who advise the IASB on develop IFRS.

But FASB is also exapanding its work beyond the countries it has traditionally met with and is building new relationships with national standard-setters in Australia, China, France, Italy, and Korea.

Golden said FASB has developed a three-pronged strategy: continue to develop high-quality GAAP standards, actively participate in the development of IFRS, and enhance relationships and communications with other national standard-setters.

“We want to work toward the goal of developing more comparable standards that are truly global—and not simply international,” he said.