Leaders of the Financial Accounting Standards Board and the International Accounting Standards Board pledged Tuesday to continue their work together, even after completing their major convergence projects for harmonizing standards.

“First, I would count the completion of our joint revenue recognition standard as a major success for both the FASB and the IASB,” said FASB chairman Russell Golden during the American Institute of CPAs’ conference on current SEC and PCAOB developments in Washington, D.C. “And while our boards came to different answers on leases and credit losses, we agreed on the important things: namely, that all leases belong on the balance sheet, and that we needed a more forward-looking model for credit losses. I believe that working toward the development of more comparable global accounting standards is important to reducing complexity in financial reporting. That’s why we continue to collaborate and cooperate with the IASB and national standards-setters with an eye toward agreeing on and adopting standards that promote common outcomes.”

Golden, who was recently appointed to a second three-year term as chairman of FASB, noted that over the past three years, FASB has contributed to improving International Financial Reporting Standards through its membership in the IASB’s Accounting Standards Advisory Forum. FASB has also met individually with standard-setters from Canada, Japan, China, South Korea and other countries to share their ideas on improving their national standards.

IASB chairman Hans Hoogervorst also spoke at the conference Tuesday and noted that he had breakfasted earlier that morning with Golden. “Even though the U.S. does not permit domestic use of IFRS standards, you have a great deal invested in our success,” said Hoogervorst. “U.S. investors have more than $7 trillion invested in companies that report using IFRS standards. Many American companies have subsidiaries that will be producing IFRS-compliant financial statements, while nearly 500 foreign companies listed on U.S. markets report using our standards. For these reasons, the IASB is keen to keep IFRS standards as closely converged as possible to U.S. GAAP. And I promise you, if the Financial Accounting Standards Board comes up with good ideas before we do, then we will steal them as quickly as possible. We have no shame, and good accounting ideas cannot be patented!”

Hoogervorst opened his remarks by expressing his appreciation for outgoing Securities and Exchange Commission chair Mary Jo White, thanking her for her cooperation. He said he agreed with the SEC’s concerns about non-GAAP financial measures and pointed to similar issues with non-IFRS measures. “We also see increasing use of non-IFRS alternative performance measures, also known as non-GAAP, which tend to dominate press releases and investor information packs,” he said. “Let me make clear that we do not intend to ban alternative performance measures, because some of them clearly have added value. Yet, we share the SEC’s concern that non-GAAP generally paints a rosier picture of a company’s performance than GAAP. This is not in the interest of investors and I even believe it is not in the interest of preparers themselves.”

Hoogervorst said the IASB plans to issue its long-awaited insurance contracts standard in the first half of 2017 and said it would help end the “accounting anarchy in the world of insurance.”

“We began this project back in 1997, so the new standard will not come one day too soon,” he said. “Should you have forgotten what a world without global accounting standards looks like, just look at the accounting anarchy in the world of insurance. Just about every country in the world does its own thing and it doesn’t look pretty.”

Golden said FASB is also planning to issue final standards on insurance and hedge accounting next year. Last week, FASB hosted roundtable discussions on hedge accounting to help make decisions on the project and expects to issue a final standard by the end of 2017. In September, FASB issued a proposed standard on long-duration insurance contracts, such as life insurance and annuities. FASB plans to host a roundtable discussion in the first quarter of 2017, he noted, and hopes to have a final standard sometime next year.

FASB also plans to continue to improve its simplification initiatives. In early 2017, FASB expects to issue final guidance to reduce the cost and complexity of determining the current versus noncurrent balance sheet classification of debt. The board also plans to issue a final standard next year to improve the accounting for nonemployee share-based payment awards issued by public and private companies. FASB also intends to focus on completing its conceptual and disclosure framework projects.

Golden hopes to leverage technology and international partnerships to advance FASB’s work.

“Technology gives us our greatest opportunity to improve financial reporting,” he said. “Over the next few years, we will focus on figuring out how financial reporting can keep pace with advances in technology so that investors get more relevant information, more quickly. We’re already seen the possibilities with XBRL. Finally, on the international front, we will continue to engage with the IASB and other national standard-setters. We expect to have joint meetings with these standard-setters in 2017 to talk about our respective priorities and future initiatives. Such relationships help us improve financial reporting, while at the same time bringing us all closer to common solutions around the globe.”

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