Financial Accounting Standards Board Chairman Robert Herz is now saying that FASB and the International Accounting Standards Board will probably miss their goal of converging U.S. and international standards by June 30, 2011.

Herz told Reuters that the two boards would probably need about another six months beyond the date set at the G-20 summit to resolve most of the outstanding issues separating U.S. GAAP from International Financial Reporting Standards. One reason is the onslaught of new proposed accounting standards updates that FASB plans to send out in the next few months. Herz said that FASB would need to distribute about 10 new proposed standards in the next couple of months, and then hurry the comment process to get them approved in time.

Financial Executives International recently sent a letter to the two accounting boards warning about the overload of new standards (see Finance Execs Fret over Accounting Standards Overhaul).

Another issue is that FASB and the IASB haven’t resolved lingering differences in important areas such as the accounting standards for financial instruments, especially in terms of the valuation of loans. “You’ve got various constituencies that are looking at this issue from a different perspective, but when you really cut through things, fair value disclosures are required,” said David Larsen, a managing director at Duff & Phelps, during an Accounting Today Unaudited podcast. “It’s just a question of placement, and arguably timing, and then the impact on the profit and loss statement, and ultimately book value, which to some extent regulators use for regulatory capital purposes.”

FASB and the IASB are planning to issue a revised workplan soon that will show the new schedule they intend to follow (see FASB and IASB Reshuffle Convergence Plans). The deadline extension will supposedly give them time to develop “high quality” global accounting standards, as opposed to, say, mediocre ones. Still, they do have a point that giving the various constituencies enough time to digest and comment on the various exposure drafts and proposed accounting standards updates is important. Accounting standard-setters discovered in the past year or so in the aftermath of the financial crisis that it’s all well and good to come up with new standards, that is, until they come into collision with the real-world economy.