Project Updates

Objectives

In October 2002, the IASB and FASB mutually agreed to undertake efforts to reduce or eliminate certain narrow differences between international financial reporting standards (IFRS) and U.S. GAAP. Those differences, while not necessarily important issues for either Board individually, are collectively major irritants to those using, preparing, auditing, or regulating cross-border financial reporting.

The overall objective of the short-term convergence effort is to improve financial reporting in the United States while concurrently eliminating a variety of individual differences between IFRS and U.S. GAAP. Projects falling under the heading of “short-term convergence” are limited to those that would address differences outside the scope of a major project for which convergence around a high-quality solution appears to be achievable in the short term, usually by selecting between existing IFRS and U.S. GAAP.

The Boards plan to accomplish their overall short-term convergence objective through a series of narrowly scoped projects. The FASB staff is evaluating whether the Board should undertake a project to address certain differences in the accounting for research and development.

Decisions Reached at the Last Meeting

At their joint meeting on April 22, 2004, the IASB and FASB directed the staff to develop an inventory of individual differences relating to the accounting for research and development that are candidates to be eliminated in the short-term convergence project.

*Immediate Plans

This potential short-term convergence project is currently in the staff research phase. The staff research consists of identifying existing differences between IFRS and U.S. GAAP relating to the accounting for research and development and evaluating the feasibility of one or more narrowly scoped projects that would improve financial reporting in the United States while eliminating differences between IFRS and U.S. GAAP. This work will include a review of 20-F filings by foreign private issuers who are applying IAS 38, Intangible Assets (as revised in March 2004), for the first time. At the same time, the IASB staff plans to consider whether IAS 38 could be improved by incorporating aspects of U.S. GAAP, in particular, aspects of FASB Statement No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed.

Staff research will continue.

Board Meeting Dates

The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final Statement or Interpretation.

The following link is to the IASB website to an IASB Update, which discusses the decisions reached at the April joint meeting between the FASB and IASB.

*Contact Information