Although both the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have said they are committed to creating a more forward-looking model for the impairment of financial assets, acrimonious disputes between the two boards has stalled convergence, says a recent report in Accountancy Age.
Speaking at an accounting conference in Brussels, IASB chair Hans Hoogervorst warned that the FASB’s more conservative approach to a forward-looking impairment model could force banks to cut back on new lending and cause credit practices to become even more “pro-cyclical.” At the meeting, Hoogervorst expressed frustration at the delay:
If this is going to unravel, I find it for us as standard setters … but also for you … deeply embarrassing that [after three years and] three efforts, in which we have looked at ten alternatives, in which we have left no stone unturned, we are still not able to come up with an answer. I would find that unacceptable.
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