Encouraged by the G-20, U.S. and international accounting standard-setters have made progress toward a single set of high-quality reporting standards, particularly in the areas of revenue recognition and asset valuation. But more is required. The two boards have not yet been able to agree on a common approach for asset impairment based on expected, rather than incurred, losses.
The G-20 has now called on them to redouble their efforts. One of the most important initiatives to improve clarity is the work of a private sector group, the Enhanced Disclosure Task Force (EDTF), which was formed at the encouragement of the Financial Stability Board (FSB).3 It has made a series of recommendations to improve annual financial reporting by banks based on seven principles.