The FASB and IASB announced yesterday that they have entered into an MOU committing to the convergence of accounting standards. The MOU addresses a variety of issues.
First, the MOU addresses areas where short-term convergence by 2008 is possible. These include the issues of the fair value option, impairment, income tax, investment properties, research and development and subsequent events.
The MOU also addresses other joint projects in areas where there is room for improvement of both US GAAP and IFRSs. Seven topics are already on the agendas of both organizations. These include business combinations, consolidations, fair value measurement, distinguishing debt from equity, performance reporting, post-retirement benefits and revenue recognition. Four other topics are not on the organizations' agendas yet, but are being researched. These topics are derecognition, financial instruments, intangible assets and leases.
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