The Financial Accounting Standards Board and the International Accounting Standards Board are soliciting input on when to have their new accounting standards take effect.
The two boards issued a discussion paper Tuesday to ask for input from stakeholders about the time and effort that will be involved in adapting to several anticipated new accounting and reporting standards and when those standards should be effective. They request comments by Jan. 31, 2011.
[IMGCAP(1)]Our joint work plan supporting the memorandum of understanding with the IASB identifies targeted completion dates for various projects, but does not address when the standards would be effective, said Acting FASB Chairman Leslie F. Seidman in a statement. We issued this discussion paper to gather the information we need to create a realistic, cost-effective plan for transitioning to the new standards.
When finalizing new standards, the boards typically identify a date from which entities will be required to start applying the new requirements (known as the effective date). The date is often 12 to 18 months after the date the standard is published, allowing time for entities to prepare for the change and for jurisdictions to implement the standards into their legal or regulatory regime.
With a number of major projects planned to be completed in 2011, the boards are seeking views on whether or how to sequence the effective dates in order to reduce the burden to interested parties.
In deciding how to proceed, the IASB said it would consider the needs of jurisdictions already using IFRS as well as those planning to do so. Feedback from the consultation will inform the boards as they jointly develop an implementation plan for those new standards that helps stakeholders to manage both the pace and cost of change.
The projects covered by the request for views include the second and third phases of the standards for financial instruments, revenue from contracts with customers, insurance contracts and leases.
[IMGCAP(2)]The next six to eight months will see a number of new IFRS being published, said IASB Chairman Sir David Tweedie in a statement. Whilst each of these standards will provide more decision-useful information to investors, we want to know if users and preparers prefer the effective dates to be batched together or sequenced over a period of time.
The discussion paper asks for stakeholder input on a number of issues such as the amount of time and effort that will be involved in learning about and transitioning to the new requirements, whether the standards should be adopted at the same time or sequentially over a number of years, and whether different effective dates would be appropriate for different classes of entities. The boards plan to use the information obtained to develop an implementation plan for the new standards that would help stakeholders manage both the pace and cost of change.
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