Academic journal article Journal of Accountancy

IASC Board Says No to Adopting FASB Financial Instruments Rules; Core Standards Will Be Delayed

Academic journal article Journal of Accountancy

IASC Board Says No to Adopting FASB Financial Instruments Rules; Core Standards Will Be Delayed

Article excerpt

The International Accounting Standards Committee board of directors rejected a proposal by the IASC executive committee and its secretary-general, Sir Bryan Carsberg, to adopt the Financial Accounting Standards Board's rules on financial instruments reporting, including the FASB standard on derivatives disclosure.

It was originally thought that, by adopting the FASB standards, the IASC would be able to meet its goal of completing a core set of standards by March 1998. The IASC had reached an agreement with the International Organization of Securities Commissions (IOSCO) in 1995 to complete core standards IOSCO could endorse for crossborder offerings and listings by March. The IASC now is hoping to have final rules on financial instruments completed in November.

The IASC board decided that adopting the FASB standards, even on an interim basis, would undermine the IASC's established due-process procedures. The board also said integrating the style of FASB standards with that of international accounting standards would be difficult. Instead, the board will prepare a new exposure draft based on the main elements of the FASB standard that could be exposed for comment by April.

According to an IASC release, the board believes the best longterm approach to improving worldwide financial instruments reporting is to join with other national standard setters to develop an "integrated and harmonized international accounting standard for financial instruments." The board agreed to expeditious review of this issue to complete the project in 1998. …

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