The IASB and FASB Convergence Process: Current Developments

The importance of harmonization of accounting standards is now widely accepted all over the world. The increased international movement of investments has strongly forces the harmonization of the various national accounting standards in a uniform financial reporting system accepted worldwide. Recently the Securities and Exchange Commission has agreed to remove the requirement of international firms reporting under International Financial Reporting Standards (IFRS) and listed in the U.S to provide reconciliation to U.S. Generally Accepted Accounting Principles (GAAP). This recent move of the Securities and Exchange Commission indicates that U.S. financial reporting is likely to converge with IFRS in the near future. The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are currently working together so as to converge their existing accounting standards into a common set of international accounting standards. The objective of this paper is to discuss the FASB and IASB convergence process by addressing current developments regarding significant topics that were deemed critical to this convergence. The convergence of GAAP and IFRS seems inevitable. Mixed opinions have been voiced about this convergence process. Many have begun to consider obstacles that is possible to lay ahead as well as the possible costs and benefits of such a move to the IFRS .