1. IFRSs subject to MoU projects
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2. IFRSs included on the IASB's current standard-setting agenda
3. All other existing IFRSs and areas not addressed by IFRSs
In developing the transition plan, one of the FASB's and Staff's highest priorities would
be to identify ways in which the potential impact of transition could be minimized for
U.S. constituents while still providing useful information to investors. This priority is
contemplated in that the framework is built on a premise that a transition to IFRS may be
most effective if it occurs over a period of time and is based on a phased transition plan at
an individual standard level. In this regard, the FASB, working with the Staff, could
develop a transition plan using the three categories of IFRSs above to minimize the
impact of transition in two ways: first, by avoiding, whenever possible, situations in
which an existing standard under IFRS is adopted by a U.S. issuer, only to be replaced by
a new standard under IFRS shortly thereafter; and second, by maximizing the number of
IFRSs subject to prospective application. This method of transition would provide for a
lengthened overall period for transition and would incorporate provisions that may lessen
the costs and burden of transition (e.g., prospective application whenever possible).
MoU Projects (Category 1)
The Boards continue to target completion of the MoU projects in 2011.
29
While
deliberations on these projects are ongoing at the date of publication of this Staff Paper,
for purposes of explaining the framework, the Staff has assumed that reasonably
converged standards will be issued for each of these projects in 2011. Therefore, these
projects would be incorporated into U.S. GAAP and IFRS in 2011, presumably before
commencement of any U.S. transition to IFRS. Thus, these projects would be expected
to have little effect on the transition plan, as both U.S. issuers and entities applying IFRS
would be required to follow the effective date and transition provisions specified in each
standard resulting from the MoU projects. However, despite the expectation that the
finalized standards resulting from the MoU projects would already be incorporated into
the respective bodies of guidance (i.e., U.S. GAAP and IFRS), implementation efforts for
those standards could be significant and could coincide with elements of the transition
plan. Therefore, the FASB would need to consider the timing of implementation for
these projects when determining the timing of convergence of other IFRSs in the
transition plan.
28
The Boards have committed to completing their projects on financial instruments, revenue recognition,
leases, the presentation of other comprehensive income, fair value measurement, balance sheet netting of
derivative and other financial instruments, and the consolidation of investment companies in 2011.
Collectively, these projects are referred to as "MoU projects."
29
See "IASB and FASB report substantial progress towards completion of convergence programme," IASB
Press Release (April 21, 2011). (available at
http://www.ifrs.org/News/Press+Releases/progress+report+2011.htm).
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