WHY WE MEET WITH OTHER STANDARD SETTERS
Last month FASB members and staff met with the International Accounting Standards Board (IASB) in London. It was our first joint meeting since 2016, and while it wasn’t a typical decision-making meeting like the ones we had earlier in the decade, it was still meaningful and insightful.
We shared ideas, research, questions, and resources. We introduced new FASB member Gary Buesser to the IASB, met new IASB members, and interacted with IASB staff.
At the meeting (which is archived online), we focused on education, implementation, and topics of mutual interest. Among many others, these included:
- Disclosure framework/disclosure initiative
- Goodwill and impairment
- Segment reporting, and
- Financial performance reporting.
Successfully maintaining and strengthening cooperative relationships with other standard setters is crucial to our mission.
It is a fair question, considering that we no longer have joint projects on our respective agendas. The answer is that successfully maintaining and strengthening cooperative relationships with other standard setters is crucial to our mission.
These relationships result in a broad, two-way flow of information and ideas that informs each organization’s thinking. We also share perspectives and circumstances that can reduce or avoid unnecessary differences among standards used internationally.
In addition to sharing information and ideas, we also seek more comparable global accounting standards.
Investors, companies, auditors, and other participants in the U.S. financial reporting system benefit greatly from high-quality accounting standards across the globe. To the extent that accounting standards are more aligned, costs for both users and preparers of financial statements can be reduced.
How do we seek greater comparability in a world where standard setters must weigh the best interests of their own capital markets?
So how do we seek greater comparability in a world where standard setters must weigh the best interests of their own capital markets?
To accomplish this, the FASB has a three-part strategy:
- Develop high-quality U.S. Generally Accepted Accounting Principles (GAAP). The high-quality standards we develop will continue to support the functioning of the U.S. capital markets. They also will continue to influence the shape and future direction of international standards, as they have for more than 40 years. By creating high-quality standards through a best-in-class standard-setting process, the FASB serves as a reference point and benchmark for others.
- Actively participate in the development of International Financial Reporting Standards. We provide input on IASB projects through the IASB’s Accounting Standards Advisory Forum. The FASB shares views based on our experience, due process, stakeholder outreach, analysis, and deliberations. Our efforts to improve GAAP directly benefit from the international perspectives we gain through our interactions with the IASB.
- Enhance relationships and communications with other national standard setters. The FASB works hard to preserve and strengthen relationships with other organizations. To accomplish this, we frequently connect and meet with other boards and their staffs. In 2018 we met again with the IASB and standard setters from Italy, Japan, Australia, Canada, Germany, and the United Kingdom.
Through collaboration, the FASB and other standard setters have delivered significant benefits to users of financial statements around the world.Increasing the comparability of standards is not easy. Different starting points, business cultures, regulatory environments, financial reporting objectives, accounting standard resources, and legal systems can make it difficult for standard setters around the world to agree on accounting approaches. Progress cannot be accomplished by the FASB alone, it requires cooperation and communication among standard setters around the world.
Through collaboration, the FASB and other standard setters have delivered significant benefits to users of financial statements around the world. I am proud of our relationships with other standard setters and look forward to meeting with the IASB and other organizations regularly.