FASB, IASB to Work on Classification and Measurement of Financial Instruments

As part of the ongoing effort at reporting convergence between FASB and IASB, the Boards will look at the issue of financial instrument classification and measurement.  The Journal of Accountancy has a brief article on topic:  An excerpt is shown below:

FASB and the International Accounting Standards Board (IASB) are working together to reduce differences in their respective classification and measurement models for financial instruments.

The boards announced Friday that they will explore these models jointly, then decide whether to propose amendments to IFRS and U.S. GAAP.

These discussions will take place as part of FASB’s ongoing reconsideration of a Proposed Accounting Standards Update (ASU) on financial instruments. The Proposed ASU, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities—Financial Instruments (Topic 825) and Derivatives and Hedging (Topic 815), was originally issued in May 2010. The IASB will take the discussions with FASB into consideration in its project to make limited changes to IFRS 9, Financial Instruments, which was issued in November 2009. The IASB’s project was amended in 2010 as a result of its ongoing work to develop a new IFRS on insurance contracts and feedback received on how IFRS 9 applies to particular instruments.

Here's the link to the article:  FASB, IASB to Work on Classification and Measurement of Financial Instruments.

Friday Five: A Global Perspective | November 18, 2011

1. China's Ex-pats: Emerging Asia Beckons.  Chris Devonshire-Ellis at china-briefing.com discusses changes in the Chinese employment system and its effect on foreign workers:

http://www.china-briefing.com/news/2011/11/18/chinas-ex-expats-emerging-asia-beckons.html

2. IASB and Japanese Regulators Work on Convergence. Inaudit.com covers the latest discussions.

http://inaudit.com/events/iasb-japan-regulators-working-on-ifrs-gaap-convergence-11166/

3. Accenture signs 5-year BPO contract for Accounts Payable outsourcing.  Accenture partners with Statoil, an international energy company with a presence in 40 countries.

http://www.offshoringtimes.com/Pages/2011/BPO_news3244.html

4.  IMF Sees "Buildup" of China Bank Risk Needing More Oversight

http://www.businessweek.com/news/2011-11-15/imf-sees-buildup-of-china-bank-risk-needing-more-oversight.html

5.  Shared Services Slash Costs.  Treasury & Risk Magazine disucsses a Hackett study that focuses on the move to multi-function shared services.

http://www.treasuryandrisk.com/2011/11/15/shared-services-slash-costs

Many oppose FASB proposal for Loan Mark-to-Market

Reuters is reporting that comments regarding an expansion of the Mark-to-Market rules for loans is running heavily against the proposal.  The expansion would impact loans and other financial instruments.

An exceprt from the article:

The banking industry has opposed the measure, saying it does not make sense to assign market prices to loans that will never be sold.

"Thus far, I think the count is up to about 1,500 or so comment letters," said Lawrence Smith, a board member of FASB, which sets U.S. accounting rules. "I think I've read one that supports what we propose."

One of the considerations impacting this proposal is the goal of FASB to achieve convergence with the IASB.  Mark-to-market accounting is one area where the two governing bodies differ.  The IASB has loans valued at amortized cost.