Monday, October 25, 2010

Financial Statement Presentation Project 'Pauses;' Removed From FASB, IASB June, 2011 Priorities

In an article published today, FASB, IASB Suspend Financial Statement Presentations Project Due to Workload, BNA's Denise Lugo reports that at the final session of the FASB, IASB joint board meeting last week, the boards decided that the financial statement presentation project will be dropped from the list of priority agenda items on which they aim to converge by June, 2011.

Focus Of June, 2011 Convergence Plan Down To Four Remaining Projects
As such, the financial statement presentation project - and the separate project aiming at convergence of accounting for liabilities vs. equity (aka the 'liability-equity project), as noted in the article FASB, IASB Ditch Effort to Converge On Liability-Equity Accounting Issues by BNA's Stephen Bouvier - will not be included among the four convergence projects prioritized for completion by the June, 2011 convergence deadline set forth in the FASB-IASB MOU as updated last year.

BNA's Lugo notes:

The four high-priority projects the boards expect to finalize by June 2011 are:

1. financial instruments,

2. leases,

3. revenue recognition, and

4. insurance.

Some highlights from the FASB and IASB boards' discussion of the deferral of the financial statement presentation project (described as a 'pause' by one of the board members), as cited by BNA's Lugo, include:

IASB Chairman Sir David Tweedie: "The danger is we come out with something we haven't proved is such a big improvement [and it involves] system changes [among other issues that would] cause major headaches.” ... Tweedie said the boards would revisit the project in June when they will have more time to deal with it...

FASB Acting Chairman Leslie Seidman: “Maybe some of [the projects within the Financial Statement Presentation project] are more easily implemented in a shorter time frame, and maybe if there's something that's perceived to be extremely costly in it, maybe that's the one that we would phase a little later. I don't think it's a foregone conclusion that this has to be implemented in one fell swoop.” ...

FASB Board Member Larry Smith: “If we're going to be honest with ourselves, we don't have capacity within ourselves to help them out. We have the big four projects that are going to take up all of our time. In addition, I don't know if the constituents have the capacity...We continue to receive feedback that we're overloading the system and this would be piling on to that overload and I don't give this project as
much priority as the other projects in terms of what we need to get done by a
certain date, so I'm supportive of ‘pausing’ to give us more time to think about
what we should accomplish with it.”

BNA's Bouvier, Lugo, and other BNA outstanding reporters like Steve Burkholder and Steven Marcy continue to provide some of the best breaking news from FASB and the IASB. (Official results of the Oct. 22 meeting are to be posted by FASB and IASB.)

We look forward to BNA's coverage, and that of other fine reporters and bloggers (including my BBF - best blogger friend, Francine McKenna, of Re: TheAuditors (recently tapped as one of 10 Worth Watching, Women Who Inspire A Profession by WebCPA, along with Joanne Barry of the NYSSCPAs, Terri Polley of the FAF, Judy O'Dell of the PCFRC, Leslie Seidman of FASB, and others), at FEI's upcoming Current Financial Reporting Issues (CFRI) conference Nov. 15-16 in NYC. Consider registering also for the Convergence Update and Planning Approaches (aka 'IFRS bootcamp' sponsored by FEI and Deloitte on Nov. 17.

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