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1220 West Third St. Little Rock, AR 72201
Phone: 501.376.3741
Fax: 501.376.9243
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News Center - Accounting Briefs |
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June 23, 2011
FASB Rejects IASB Netting Proposal
The Financial Accounting Standards Board last week tentatively decided to reject -- by a 4-3 vote -- a proposal that would have added more than $1 trillion of assets and liabilities to some large banks’ balance sheets and thrown U.S. regulatory leverage ratios into chaos.
The AmBA-opposed proposal, which was jointly issued with the International Accounting Standards Board, would have required gross reporting of derivative assets and liabilities done with an individual counterparty, even though the assets and liabilities would be netted under master netting agreements banks have with counterparties.
Related issues, however, remain open, including guidelines to be followed in disclosing derivative positions. The tentative decision to retain current generally accepted accounting principles, along with the IASB’s decision to require gross presentation of such amounts, is a divergence from the path of attempting to converge U.S. GAAP with International Financial Reporting Standards.
AmBA
believes FASB’s approach provides better information about how derivatives are managed than the IASB’s approach. For more information, contact
AmBA
's Mike Gullette.
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