Financial Accounting Standards Board (FASB) chairman Robert Herz has recently announced his sudden retirement two years before the expected end of his term. This news comes in the midst of a crucial time of transition for US GAAP, as the FASB works with the International Accounting Standards Board (IASB) to converge US accounting standards with International Financial Reporting Standards (IFRS). The FASB will also add two new members in addition to the current five. These changes in the leadership mandated with overhauling US GAAP has placed many companies and accounting professionals on edge about the uncertainty of current convergence efforts.
The FASB currently has nine exposure drafts awaiting public comment, and votes on these may be delayed as the additional board members are appointed and the chairmanship is in transition. Many worry that such an important initiative as US GAAP/IFRS convergence which impacts the global business environment, will be derailed by such a sudden and significant change in leadership. At the same time, the new chairperson and board members may be the catalysts needed to continue the momentum already gained by the FASB in this effort. Time will tell.
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