The U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are pushing back the deadline for a major insurance standards project.
FASB, Norwalk, Conn., made an official decision in February to work with IASB, London, to try to develop a single accounting standard for insurance contracts.
IASB had been hoping to complete work on its standard by June. Some trade groups came away from the February meeting that the new completion deadline would be in December, but IASB officials did not reply to questions about the possibility that the deadline had been postponed.
FASB Chairman Leslie Seidman and Sir David Tweedie, the IASB chairman, today said during a joint podcast that they plan to extend work on core projects such as the insurance project, a revenue recognition project, a leasing project, and a financial instruments project by “a few months.”
FASB, which is in charge of the U.S. Generally Accepted Accounting Principles (GAAP) rules, says the GAAP system has insurance contract accounting rules that are getting on in years.
IASB, which is in charge of the International Financial Reporting Standards (IFRS) rules used in many countries outside the United States, now lacks a specific IFRS for insurance contracts.
Seidman said during the podcast the FASB and IASB officials do not want to “let a target date take priority over thorough and robust due process.”
“Our due process is designed to be open, inclusive and deliberate and we want our stakeholders to
be active participants in the process, so let me clarify any misunderstanding about the June 2011 date,” Seidman said, according to a written version of the podcast provided by FASB officials. “It was always intended to be a target, not a deadline, and we always said that achieving the target was subject to the nature and extent of the feedback that we got on each of the exposure documents.”
FASB and IASB officials are still working through the issues raised in feedback to project exposure documents, Seidman said.
Tweedie said FASB and IASB will be focusing tightly on the core projects.