US gains seat on IASB advisory board

The Financial Accounting Standards Board (FASB) won a seat on an advisory board that has the ear of international standard setters, all while preserving the right to craft its own local accounting rules. 

Initially the IFRS Foundation, the group responsible for setting international accounting standards, wanted all members of its recently created advisory board to promote wholesale adoption of its standards. The group’s goal is to move the world to one unified set of accounting rules, making it easier for chief financial officers and others to read and prepare financial statements across borders. 

However, the US is still not sure if wholesale adoption of international financial reporting standards is in its best interests, according to sources. Because the government has not yet pledged its commitment to full convergence of standards, it was feared FASB would be barred from sitting on the advisory council.

To avoid this outcome the entry requirements were relaxed to allow the world’s largest economy a seat at the table. FASB’s participation on the advisory board strengthens the US’ commitment to converged standards, said Robert Stewart, a spokesperson for the Financial Accounting Foundation, the body that oversees US accounting rulemakers. 

FASB and its globally-focused counterpart the International Accounting Standards Board are expected to release their final joint standard on revenue recognition before end of second quarter, according to one industry source. 

Nonetheless industry sources are questioning the US’ commitment to convergence. Last July, a long-awaited report from the Securities and Exchange Commission failed to clarify the government’s position on adoption of international reporting standards. And Mary Jo White, nominated to run the SEC, has not provided many signals that convergence will be a priority at the agency if cleared for the job by Congress.