The International Accounting Standards Board has proposed changing the accounting standards for measuring and classifying financial instruments in response to concerns raised by the financial crisis.
The proposals are intended to eliminate the confusing distinctions among various impairment approaches for available-for-sale assets and assets measured using amortized cost. The IASB is working closely with the U.S. Financial Accounting Standards Board on the changes, as International Financial Reporting Standards continue to converge with U.S. GAAP.
The IASB plans to finalize the classification and measurement proposals in time for non-mandatory application in 2009 year-end financial statements.
The financial crisis has demonstrated that investors need to be given a better understanding of information presented in the financial statements about financial instruments held or issued by a company, said IASB Chairman Sir David Tweedie in a statement. Making it easier for investors to understand financial statements is an essential ingredient to the recovery of investor confidence.
The IASB wants to hear comments on the new proposals by Sept. 14.
In addition to releasing its new exposure draft on financial instruments classification and measurement, the IASB also plans to address the related subjects of impairment methodology and hedge accounting in future exposure drafts as part of a plan to complete the replacement of the IAS 39 standards next year. Mandatory application of the new standards will not come before January 2012, however.
For more information, see the IASB Snapshot, a high-level summary of the proposals.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access