FASB closer to convergence of global standards

California CPA, March-April, 2004

FASB has issued four exposure drafts to move U.S. GAAP closer to existing international accounting standards.

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The exposure drafts were the first phase of an ongoing collaboration between FASB and the International Accounting Standards Board that began in 2002.

The exposure drafts propose:

* Voluntary changes in accounting policies that would be applied by retrospective application, rather than by cumulative effect adjustment;

* Three changes to the calculation of earnings per share;

* Asset exchanges that would require a gain or loss to be recognized on the exchange of similar productive assets based on the fair value of the exchange unless the exchange lacks commercial substance; and

* Unusual amounts of idle capacity and spoilage costs would be excluded from the cost of inventory and expensed as incurred. The comment period ends April 13.

For more information, visit www.fasb.org/news/nr121503.shtml.>

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