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FASB and IASB Play Tag Team

November 16, 2010

Financial Accounting Standards Board acting chair Leslie Seidman and International Accounting Standards Board member John Smith gave a fast-paced rundown of where the two boards stand on their various convergence projects, and the overall message seemed to be, “We’re listening to you, folks.”

The setting was Financial Executives International’s Current Financial Reporting Issues Conference in New York on Monday. The FASB and IASB officials took turns explaining how soon they expect to reach their goals. Of the ever-controversial financial instruments project, Seidman said, “I think the strategy to stagger things is working.” She noted that FASB had received over 2,800 comment letters. She freely admitted that “most of it was not fan mail,” but she described the series of follow-up interviews that her board was conducting, which seemed to be helping matters.

Speaking of interviews, she also responded to a question about where FASB stands in filling the positions on its newly expanded board. She said she hopes to have them seated by the end of the year.

The IASB has also been hearing its share of criticism of many of its proposed standards. Smith noted that most of the comments the board had received about its proposals for expanding Other Comprehensive Income, or OCI, have been negative. People have been concerned about the potential recycling of all OCI items to net income, or that the IASB would actually get rid of net income altogether and confuse users. He assured attendees that the IASB has no intention of getting rid of net income. Like FASB, his board is also poring through the comments it receives, while trying to avoid any brickbats thrown through the window.

Meanwhile the two boards are asking for advice on how they should stagger the effective dates of the standards to avoid overwhelming busy accountants. But still, they admitted that it was hard to please everybody.

“No matter what we do, we’ll always get it wrong,” said Smith. “There’s a lot of moving parts. We try as best we can to ease the pain.”

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