Herz moves convergence deadline six months

Accounting convergence between the US and international accounting codes will be pushed back as much as six months, the head of the US accounting rule maker has warned.

Robert Herz, chairman of the Financial Accounting Standards Board (FASB), said he has been working on a “revised workplan” which would shift the convergence deadline from June 2011, to, potentially, December, Reuters reports.

“We’ve been working on a revised work plan with the IASB,” Herz told Reuters.

“We’d all like to see the work done as expeditiously as possible, but we don’t want to sacrifice proper due process.”

FASB and its international counterpart, the International Accounting Standards Board (IASB) have been working towards a June 2011 deadline set by the G20, to converge their two accounting codes.

The two boards have 11 projects on the table to find agreement on – a timetable many considered ambitious. To meet the deadline the board would have to release 10 proposals within in the next two months.

The IASB came under criticism from a number of accounting bodies, including the ICAEW,which felt they were being left with limited time to properly understand and provide meaningful feedback on the accounting proposals.

Herz said he was not prepared to rush through the public consultation process and hopes to “get most if not all of them done by the end of 2011”.

It’s unclear how this will affect US adoption plans. The US Securities and Exchanges Commission (SEC) is currently investigating what impact the adoption of international accounting rules would have on US companies. It said it will make a final decision on US adoption by June, coinciding with the FASB’s and the IASB’s convergence deadline.

The Boards are expected to announce changes to their convergence work plan in the next week.

Further reading:

Accounting rulemakers to delay convergence

The long and winding roadmap