The International Accounting Standards Board (IASB), based in London, and the US Financial Accounting Standards Board (FASB) have announced publication of an Exposure Draft containing joint proposals to improve and align accounting for business combinations. The proposed standard would replace IASB’s International Financial Reporting Standard (IFRS) 3, Business Combinations and the FASB’s Statement 141, Business Combinations.

Sir David Tweedie, IASB Chairman and Bob Herz, FASB Chairman, emphasized the value of a single standard to users and preparers of financial statements of companies around the world as it improves comparability of financial information.

"Development of a single standard demonstrates the ability of the IASB and the FASB to work together,” Tweedie continued.

In September 2002, IASB and FASB adopted a “best efforts” approach to the conversion of the provisions of IFRS and US GAAP. In a memo entitled the “Norwalk Agreement” \the IASB and the FASB established their joint goal to...

• make their existing financial reporting standards fully compatible as soon as practicable and,
• Coordinate their future work programs to ensure that one achieved, compatibility is maintained.

Currently, in the US, the Securities and Exchange Commission (SEC) requires non-US private companies who file with the SEC to reconcile financial statements prepared under IFRS to US GAAP. According to an SEC press release on April 21, 2005, the then SEC Chairman, William Donaldson, meeting with EU Commissioner Charles McGreevey, discussed a “roadmap” that highlights the steps needed to eliminate the US GAAP reconciliation. The SEC roadmap “establishes a goal of eliminating the requirement as “early as possible between now and 2009 at the latest."