The FASB and IASB have been working on a joint project on financial instruments. The project includes classification and measurement of financial instruments, impairment of financial assets, and hedging. However, the boards have not converged on each element, so there are expected to be differences in the final standards. Most recently, after previously working together on a “three bucket” impairment model, the FASB decided to move to a model they view to be more operational. Meanwhile, the boards are generally in sync on their classification and measurement guidance.
In the fourth quarter of 2012, the FASB completed its re-deliberations on its proposed impairment model, referred to as the current expected credit loss (CECL) model. The FASB issued its exposure draft at the end of the fourth quarter and comments are due by April 30, 2013. See Dataline 2013-01, FASB Credit losses on financial assets, for further information. The IASB, on the other hand, still intends to move forward with an exposure draft on the “three bucket” model, now known as the "credit deterioration" model.
Meanwhile, the boards have completed their joint project on classification and measurement, reaching a broadly converged approach for debt investments. The IASB issued its exposure draft on limited amendments to IFRS 9 in November, 2012. The FASB issued its exposure draft on classification and measurement of financial assets and financial liabilities in February 2013. See In brief 2013-08, FASB proposes a new model for classification and measurement of financial instruments.
However, there are still key areas where differences remain between the FASB’s and IASB’s models that are currently not being discussed by the boards:
The comments are in on the FASB's proposal to require new disclosures about liquidity and interest rate risks, and the feedback was overwhelmingly negative. The proposal introduced new quantitative and qualitative liquidity risk disclosures for all entities. For financial institutions, the proposal went further, requiring more extensive liquidity disclosures and interest rate risk disclosures. The negative feedback has convinced the FASB to revisit the objective of the proposal and see how they can revise it. Over the past several months, issuers and other constituents in a variety of industries have raised concerns to the FASB staff and board regarding the scope of the new balance sheet offsetting disclosure requirements. In response to these concerns, at its October 31 meeting the FASB decided to amend and clarify the scope of the balance sheet offsetting disclosures to include only derivatives, repurchase agreements and securities lending transactions. The FASB issued its exposure draft on balance sheet offsetting in November of 2012 with comments due in December of 2012. These disclosures are effective in Q1 2013 for calendar year-end companies.
The IASB is expected to issue their exposure draft on impairment late in the first quarter of 2013.
The FASB exposure draft has been released for public comment with the comment period ending on May 15, 2013.The IASB issued their exposure draft on limited amendments to IFRS 9 in November of 2012, with the comment period ending on March 28, 2013.