Leaders of the Financial Accounting Standards Board and the International Accounting Standards Board said Thursday they have pushed back their work on the handful of “priority” projects they had committed to complete this year.
The delay was announced in a joint podcast by FASB chair Leslie Seidman and IASB chairman Sir David Tweedie. They said they would “extend by a few months” their work on the revenue recognition, leasing, financial instruments and insurance projects.
In the podcast, they insisted that the original June 2011 date by which they had originally planned to complete their major convergence projects was merely a “target” and not a firm “deadline.”
They acknowledged, however, that the Group of 20 international economic leaders had encouraged them to complete their work by June 2011. FASB declined to offer interviews with its officials.
Last fall, the two boards extended the timeline for the major convergence projects after an earlier extension from June 2011 to the end of 2011 (see FASB and IASB Rejigger Convergence Plans). Under the timeline set late last year, the two boards agreed to concentrate on completing the revenue recognition, leasing and financial instruments standards by the end of the year. Tweedie’s second term as chairman of IASB will end in June and he will be replaced by Hans Hoogervorst.
“We have decided to extend the timetable for a few additional months to enable us to check whether our conclusions will last the test of time,” Tweedie said in the podcast. “We are also mindful of the G20 target. We have been reminded of that many times over the last few years, and we intend to try to finish this convergence program by the end of 2011. The June target has helped us to get there but at the same time it is clear that we need a little more time to check the conclusions, and to ensure that the standards are of the highest quality.”
He and Seidman said they needed the extra time to incorporate the feedback they had received on the exposure drafts of the proposed standards and to hone the standards in response.
“Let me assure you that as professional standard-setting boards we are taking these concerns very seriously,” said Seidman. “We would never let a target date take priority over thorough and robust due process. Our due process is designed to be open, inclusive and deliberate and we want our stakeholders to be active participants in the process, so let me clarify any misunderstanding about the June 2011 date. It was always intended to be a target, not a deadline, and we always said that achieving the target was subject to the nature and extent of the feedback that we got on each of the exposure documents. At this point on each of the exposure documents we have received significant and very constructive feedback and we are in the process of working through those issues. The quality of the standards remains of the utmost importance. Every board member wants to issue high-quality standards that we think are going to withstand the test of time.”
Seidman and Tweedie did not provide a firm date for the convergence work on the four standards. However, according to FASB spokesman Neal McGarity, the two boards will issue an updated progress report next week that will lay out the plans for completion of the revenue recognition, leasing, financial instruments and insurance projects. The progres report will also include the remaining issues to be addressed by FASB and the IASB, and the type of outreach that will be conducted for additional input on the final standards.
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