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The International Organization of Securities Commissions (IOSCO) is the international body that brings together securities regulators and is recognised as the global standard-setter for securities regulation. The organisation's membership regulates more than 95% of the world's securities markets and is responsible for the oversight of capital markets and the application and enforcement of accounting and audit standards in those markets, as well as promoting sound disclosure principles. IOSCO’s objectives are protecting investors, maintaining fair, efficient and transparent markets and seeking to address systemic risks. The application of accounting standards results in issuers providing relevant and representationally faithful information to allow investors to make informed investment decisions.
IOSCO has consistently supported the objective of a single set of high-quality accounting standards that are consistently and rigorously applied. This view is also shared by the leaders of G20 and other international organisations. With this in mind, we encourage the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) to collaborate closely with each other on accounting for goodwill so that moving forward the alignment between IFRS and U.S. GAAP in this area can be maintained or enhanced.
We recently submitted a comment letter to the IASB on its Discussion Paper Business Combinations-Disclosures, Goodwill and Impairment. We note that the FASB is also revisiting its requirements on the accounting for goodwill. In the past, the IASB and FASB have collaborated on the development of standards on business combinations and goodwill and have achieved a high degree of convergence on these accounting topics which greatly helps investors understand and compare financial information of issuers across the globe.
We observe that when the requirements under U.S. GAAP are as aligned as possible with those under IFRS on accounting for goodwill, there is greater comparability in financial statements prepared under IFRS and U.S. GAAP. In our experience, the likelihood of achieving a converged outcome is greatly enhanced when the two Boards work collaboratively, including similar timelines with their respective projects. We believe that maintaining and enhancing convergence in this area should continue to be an important consideration for the IASB and FASB.
IOSCO remains committed to continuing to work closely with the IASB and FASB while respecting the independence of their standard setting processes.
