In the realm of accounting, no one moved more rapidly this year than the Financial Accounting Standards Board and the International Accounting Standards Board. The two standard-setting bodies set forth an aggressive agenda that called for a dozen or so new rules to be issued by 2011.
Their aim was to complete their now eight-year-old convergence project and emerge with a single set of global accounting standards. But the effort was ambushed by reality — the global financial crisis and subsequent global recession; heated debates over controversial rulemaking decisions; the early retirement of FASB chairman Robert Herz; and the announced departure of IASB chairman Sir David Tweedie, slated for June 2011. (On December 23, the trustees of the Financial Accounting Foundation announced that Leslie F. Seidman, acting FASB chairman since Herz’s retirement, had been named chairman of FASB, effectively immediately.)
Accordingly, the rulemakers slowed down the convergence process in the latter part of 2010, vowing to issue only four newly melded standards at any one time. Still, they hope to finish a number of convergence projects by the end of 2011. That will be a prickly task, since those projects have shaken some fundamental tenets of business. They will, for instance, eliminate the concept of operating leases, rework revenue-recognition rules, do away with last-in-first-out inventory accounting, and expand the reach of fair-value accounting.
Meanwhile, the process of adopting private-company accounting standards (“little GAAP”) in the United States began in 2010, and could eventually become the purview of a second standard-setting board. The debate concerning final decisions about little GAAP should come to a head in 2011 — just in time for the Securities and Exchange Commission’s decision on whether or not U.S. publicly traded companies should abandon U.S. generally accepted accounting principles in favor of international standards.
By doing away with operating leases, new accounting rules could bring billions of dollars back onto balance sheets.
FASB and the IASB have selected five priority projects to focus on – and hopefully push out by next year.
A blue-ribbon panel on private-company accounting standards recommends a separate GAAP for private companies.
As the pace of accounting-rule changes intensifies, can IT systems keep up?
Tom Jones, director of Pace University’s international accounting center, looks forward to a world without local GAAPs.
Experts expose seven misconceptions about international financial reporting standards.
In an exclusive interview, Robert Herz talks about his legacy as chairman of the Financial Accounting Standards Board.
Financial executives say that proposed changes to revenue-recognition rules ignore real-world realities.
How much will ERP systems have to be tweaked to comply with FASB’s new revenue-recognition rules?
Among the ripple effects of the global credit crisis is the rewrite of the controversial fair-value accounting rule once known as FAS 157. The revised standard could be in place by the end of the year.