The move is one of several plans to revise the rules announced by standard setters in response to the global credit crunch.

The rules on off balance sheet structures allowed lenders to keep risky assets off their books, but were forced to bring them on to the books when their valuations dropped in a spiralling market, causing billions in writedowns.

Financial Accounting Standards Board chairman Robert Herz said the group had been tasked by the US President’s Working Group to fix the problematic rules by the end of the year.

The FASB has resolved to ‘kill’ qualified special purpose entities (QSPEs) which allowed lenders to take assets off their balance sheets.

Herz described the off balance sheet structures as ‘ticking bombs’, which were tolerable until recently.

‘Once subprime mortgages were put into QSPEs, they were ticking time bombs.

‘And the bombs started to explode. The vehicles required “intensive restructuring” that went beyond what would have been allowed for a QSPE,’ said Herz.

He said that he did not believe there was any gap in the disclosure requirements of US GAAP or SEC rules.

‘Fin 46 listed disclosures, but until things went downhill they didn’t always illicit the kind of disclosures that were intended,’ said Herz.

IASB chairman Sir David Tweedie said the boards were looking at consolidation of SPEs, derecognition of the vehicles, and measuring financial assets and liabilities at fair value ­ each of which raised different issues during the credit crunch, often exacerbating problems on balance sheets.

‘It’s quite clear from the reaction of the Financial Stability Forum, in its report to the G7, in which we were involved, that there is great concern on the three issues,’ said Tweedie.

To accelerate the review, the IASB will jump the discussion document stage and instead publish exposure drafts.