The White House senior economic adviser, Paul Volker, has called for US and international accounting bodies to find common ground on their financial instrument reforms, warning both now are on a collision course.
The ageing former US Reserve Bank chief used a speech at the International Organization of Securities Commissions (IOSCO) Montreal conference to highlight concerns on current attempts to harmonise US and International standards on financial instruments, Reuters reports.
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have taken divergent approach on how to measure and classify financial instruments. FASB has proposed a full fair value model with instruments measured at their market, exist price. The IASB has a mixed-measurement model in place which allows banks to measure their held-to-maturity instruments at amortised cost.
If the two groups can not reach agreement on financial instruments by June 2011, it may jeopardise US adoption of international standards.
Volker said he hoped the two boards could reach a concensus.
“What appeared to be two organisations converging … now looks like a collision,” Volcker told the IOSCO conference.
“I hope they can come together by the end of the year,” he said.
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