Mario Christodoulou, Accountancy Age, Thursday 10 June 2010 at 09:38:00

Former US Reserve Bank chiefcalls for acocunting convergence

The White House senior economic adviser, Paul Volker, has called for US andinternational accounting bodies to find common ground on their financialinstrument reforms, warning both now are on a collision course.

The ageing former US Reserve Bank chief used a speech at the InternationalOrganization of Securities Commissions (IOSCO) Montreal conference to highlightconcerns on current attempts to harmonise US and International standards onfinancial instruments,Reutersreports.

The International Accounting Standards Board (IASB) and the FinancialAccounting Standards Board (FASB) have taken divergent approach on how tomeasure and classify financial instruments. FASB has proposed a full fair valuemodel with instruments measured at their market, exist price. The IASB has amixed-measurement model in place which allows banks to measure theirheld-to-maturity instruments at amortised cost.

If the two groups can not reach agreement on financial instruments by June2011, it may jeopardise US adoption of international standards.

Volker said he hoped the two boards could reach a concensus.

"What appeared to be two organisations converging ... now looks like acollision," Volcker told the IOSCO conference.

"I hope they can come together by the end of the year," he said.

Further reading:Volckerupbeat on "reasonable" reform bill