The FAF, which oversees the work of the US’s Financial Accounting Standards Board (FASB), will give up to three payments of $1 million during 2014 to the International Accounting Standards Board(IASB), the IFRSF’s standard-setting body, as it continues to work on four joint accounting standards projects - revenue recognition, leasing, financial instruments (both classification & measurement and impairment) and insurance - with the FASB, which develops US Generally Accepted Accounting Principles (GAAP).
A statement from the FAF said its trustees made one previous contribution of $500,000 to the IFRSF in 2011, adding that technical staff from the FASB have also dedicated much of their time to convergence projects since 2002, the year in which that organisation and the IASB formally agreed to work together on bringing US GAAP and International Financial Reporting Standards and closer together.
Last November the FASB and the IASB separately authorised the preparation of a final draft of a converged revenue recognition accounting standard. This is due to come out before the end of March.
The aims of a new revenue recognition standard are to:
· Remove inconsistencies and weaknesses in existing revenue requirements.
· Provide a more robust framework for addressing revenue issues.
· Improve comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets.
· Provide more useful information to users of financial statements through improved disclosure requirements.
· Simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer.
