The American Institute of CPAs and the Institute of Chartered Accountants in England and Wales are urging the Financial Accounting Standards Board to reconsider two separate elements of FASB’s financial instruments convergence project with the International Accounting Standards Board.

The AICPA’s Financial Reporting Executive Committee, or FinREC for short, sent a letter Tuesday to FASB outlining its concerns with the proposed accounting standards update for Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). FinREC said it supported the efforts of FASB and the IASB to more closely align U.S. GAAP with International Financial Reporting Standards, but cautioned that “high-quality accounting standards should not be sacrificed for the sake of convergence.” The letter cited several positive aspects that FinREC agreed with, such as requiring all entities to report fluctuations in instrument-specific credit risk (own credit) in other comprehensive income (OCI) rather than net income for liabilities under the fair value option election. The AICPA committee said it also supported FASB’s position on changes in fair value of equity securities being recorded through net income, as well as the elimination of the tainting provisions for sales from the hold-to-collect category.

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