Comment letters responding to a recent FASB proposal suggest that the accounting standard setter should leave the writing of new accounting rules to its international counterpart.
There was a very good article in the CFO Magazine yesterday dealing with the FASBs proposals to amend FAS 5. Who should write the rules? was written by Tim Reason. According to the article:
FASB's proposal to amend FAS 5, Accounting for Contingencies, would require companies to disclose "specific quantitative and qualitative information" about loss contingencies — particularly from lawsuits — and to estimate their possible maximum loss. Further departing from current practice, companies would have to disclose even "remote" possibilities of loss if the cases were expected to be resolved within a year.
Comment letters sent to the FASB noted that the new proposals differ from the International equivalent IAS37. Some respondants had analyzed financial statements of IFRS reporting companies and concluded that the reporting standard (employed in practice) is much less than in the recent US proposals.
Many noted that it is widely expected that the US will converge with IFRS in the next few years although a date for convergence, if any, has yet to be announced.
The IASB has been working on a project to amend IAS37 since 2002 (the scope was widened in 2003). An Exposure Draft , Proposed Amendments to IAS 37 Provisions Contingent Liabilities and Contingent Assets and IAS 19 Employee Benefits was issued in 2005. A discussion ( 55 pages) of the full project history and most current proposals of the IASB can be found at: http://www.iasb.org/NR/rdonlyres/B2EE99F3-C48E-40A1-8827-5137C92C0EF4/0/LiabIAS37projectJune08.pdf. The IASB has been considering further comments received from Roundtable discussions and it is expected that a final IFRS standard will be issued in the first half of 2010.