This year provided further examples signifying the end of the IASB and FASB convergence efforts. For some projects, such as leases and insurance, it was already clear that convergence was no longer the main objective in the completion of the project. However, 2015 saw the finality of that decision as the Boards prepared non-converged ballot drafts of their new standards on lease accounting because they were unable to reconcile their views on the lessee accounting model. This year also brought an unexpected change in the convergence agenda which saw the IASB and the FASB propose different changes to their previously fully converged standards on revenue recognition issued in 2014. These different approaches will result in new revenue standards that are no longer converged, albeit both with the same effective date of January 1, 2018. The lack of convergence of IFRS and US GAAP for these major topics is particularly relevant for Canadian companies as both frameworks are used by Canadian companies and US GAAP continues to be prevalent in certain industries in North America. Messages from the FASB Chairman indicating that it is unlikely that IFRS will be adopted in the US in the near term suggest that the lack of convergence will continue for years to come. Read more.
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