In their 3rd Progress Report - published earlier this week - on the status of convergence projects outlined in their Convergence MOU (Memorandum of Understanding), the FASB and IASB list the 'priority' projects which are still slated for completion by June 2011 'if not sooner,' note lesser priority projects deferred, and emphasize that feedback from stakeholders is important as they complete these projects.
Priority Projects Slated for Completion by June, 2011
The progress report lists these projects as priority projects slated for completion by June, 2011:
- financial instruments,
- revenue recognition,
- the presentation of other comprehensive income, and
- fair value measurement.
- improved disclosures about derecognised assets and other off-balance-sheet risks (aligning with recently issued US GAAP requirements),
- consolidations (particularly in relation to structured entities) and
- insurance contracts.
Deferral of Lesser Priority Projects
The MOU Progress Report reiterates decisions on deferring certain lesser priority projects, listed below, in order to focus the boards' resources on completing the priority projects by June, 2011. (We previously reported on some of these deferral decisions here and here.)
The deferred joint projects include:
- the broader financial statement presentation project,
- financial instruments with characteristics of equity,
- emissions trading schemes, and
- the reporting entity phase of the conceptual framework
- consolidation of investment companies
- contingency disclosures (relating to FAS 5 and IAS 37).
The joint progress report states:
Even with those work plan changes, completion of the priority projects requires
a focused and intense effort by both us and our stakeholders. Our commitment is
to the development of high-quality, improved, and converged standards developed
using robust due process.
No matter what stakeholder category you fall into (investor, lender, preparer, auditor, board member, other), it is worth taking note of the fact that the boards actively seek your input as they continue to march down what I'll call 'Convergence Road,' to June, 2011.
As stated in the just-issued Progress Report:
The feedback that we have received (and will continue to receive) through comment letters and other outreach efforts is being considered carefully and will determine the focus of our redeliberations and other steps and efforts that will be required to finalise new standards. We are committed to conducting additional outreach during the redeliberations period, as necessary, to ensure the quality and effective implementation of the final standards.
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