In more convergence news, last Friday the IASB and FASB released common disclosure requirements intended to help investors and other financial statement users “better assess the effect or potential effect of offsetting arrangements on a company’s financial position,” says a joint release. In response to feedback from their respective stakeholders, the boards decided to retain their existing offsetting models, supplemented by these new disclosure requirements to allow investors “to better compare financial statements prepared in accordance with IFRSs or US GAAP.”
“These disclosures will help investors to bridge differences in the offsetting reporting requirements of IFRSs and US GAAP, while the additional requirements will also provide better information on how companies mitigate credit risk related to offsetting,” says IASB chair Hans Hoogervorst. “That said, using disclosures to bridge differences in offsetting requirements was plan ‘B’ for both boards.”
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