The International Accounting Standards Board has proposed delaying by two years the mandatory effective date for its IFRS 9 standards for financial instruments, postponing them from Jan. 1, 2013 to Jan. 1, 2015.

In an exposure draft, the board said Thursday that it was important to align all of the phases of the project, including both the completed and ongoing parts, so they would have the same effective date for when they become mandatory for companies to apply.

The IASB has struggled to converge its standards for financial instruments with the Financial Accounting Standards Board in the U.S., especially in response to the financial crisis. The two boards disagreed over how to treat impaired bank loans, for example, with FASB initially leaning toward accounting for them at fair value. More recently, it has opted to more or less follow the IASB’s approach of accounting for them at amortized cost, especially when they are going to be held to maturity, but the two boards are still working out their areas of disagreement.

The IASB decided in 2009 to replace the older standard for financial instruments, IAS 39, with IFRS 9, which would be rolled out in three parts (see IASB Treads Cautiously on Asset Impairment). FASB has its own system for rolling out new standards, known as Accounting Standards Updates.

The Securities and Exchange Commission is expected to decide by the end of the year whether it will eventually incorporate International Financial Reporting Standards into the U.S. financial reporting system. The new vice chairman of the IASB, Ian Mackintosh, recently warned in a webcast that the IASB would stop working with the U.S. on joint projects unless the U.S. agrees to endorse IFRS, according to Global Financial Strategy News.

The IASB’s proposed deferral would only change the date when IFRS 9 would be mandatory.  Entities could still elect to use IFRS 9 before 2015.

“The Board confirmed the importance of allowing entities to apply the requirements of all of the phases of the project to replace IAS 39 at the same time,” it said in the exposure draft. “They also confirmed that the date of initial application of any new requirements for the accounting for insurance contracts needs to be considered. As a result of these considerations, the Board proposed that the mandatory effective date of IFRS 9 (2009) and IFRS 9 (2010) should be deferred to annual periods beginning on or after 1 January 2015. The Board noted that they did not want to discourage entities from applying IFRS 9 and stressed that early application of IFRS 9 would still be permitted.”

The comment period for the IASB’s exposure draft closes on Oct. 21, 2011. It can be downloaded at

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