IASB and FASB Consult on Dates for Accounting Standards
The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) have published documents seeking views on when new financial reporting standards resulting primarily from their work to improve and achieve convergence of International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP) should become effective.
When finalising an IFRS, the IASB will identify a date from which entities will be required to start applying the new requirements (known as the effective date). This date is often 12-18 months after the date the IFRS is published, allowing time for entities to prepare for the change and for jurisdictions to implement the IFRS into their legal or regulatory regime.
With a number of major projects to be completed in 2011, the boards are seeking views on whether or how to sequence effective dates in order to reduce the burden to interested parties. In deciding how to proceed, the IASB will consider the needs of jurisdictions already using IFRSs as well as those planning to do so. Feedback from the consultation will inform the boards as they jointly develop an implementation plan for those new standards that helps stakeholders to manage both the pace and cost of change.
The projects covered by the request for views include the second and third phases of financial instruments, revenue from contracts with customers, insurance contracts and leases. Comments are requested by 31 January 2011.
Sir David Tweedie, chairman of the IASB, said: “The next six to eight months will see a number of new IFRSs being published. While each of these standards will provide more decision-useful information to investors, we want to know if users and preparers prefer the effective dates to be batched together or sequenced over a period of time.”