Nine trade groups representing the financial, insurance, banking, real estate and other industries have united to create a coalition with the goal of influencing accounting standard-setters who are working on revising the rules for financial instruments.
The new coalition, known as the Financial Instruments Reporting and Convergence Alliance, or FIRCA, aims to influence the ongoing convergence efforts of the Financial Accounting Standards Board and the International Accounting Standards Board, and their efforts to address the financial crisis. FIRCA includes the American Council of Life Insurers, the Commercial Mortgage Securities Association, the Council of Federal Home Loan Banks, the Financial Services Roundtable, the Group of North American Insurance Enterprises, the Mortgage Bankers Association, the Property Casualty Insurance Association of America, the Real Estate Roundtable and the U.S. Chamber of Commerce.
They plan to engage FASB and the IASB on a series of projects to reform accounting standards associated with the financial crisis.
The drive to revise accounting standards for financial instruments is gaining fresh momentum both in the United States and internationally, said GNAIE executive chairman Jerry de St. Paer. These developments make it essential for the insurance industry and other affected businesses to provide input, assistance and perspective to U.S. and international standard-setters that will enable them to develop high-quality, robust standards. Our new coalition will help attain those goals.
Last week, the Obama administration announced regulatory reform measures, including reviews of accounting rules and an acceleration of accounting reforms related to the financial crisis. In April, the Financial Crisis Advisory Group, a joint committee of FASB and IASB, wrote to G-20 leaders informing them of efforts to overhaul accounting rules.
The FCAG projects include efforts to replace, update or converge the current accounting standards for financial instruments, consolidation, and derecognition. Some of those projects are expected to be completed by the end of this year.
De St. Paer said that members of FIRCA are committed to two goals:
· Supporting the adoption of joint IASB-FASB international, high-quality, robust accounting standards. These standards should be decision-useful, reliable and relevant. Additionally, these standards should present financial information in a manner that is reflective of the business operations of an entity. Appropriately crafted standards should transparently provide information and not drive economic activity.
· Assisting standard-setters in providing a wide range of input to ensure the proper consideration of business operations and potential unintended consequences in the development and implementation of accounting standards.
· Recognizing that the financial crisis is global in scope and magnitude, to work with standard-setters and decision-makers to ensure that these projects are conducted jointly to ensure a comprehensive response to financial reporting policies.
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