FASB/IASB: Where next?

From the IFRS Institute – September 15, 2026

Authors: Valerie Boissou, Sandeep Chotrani

In June, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) held a joint educational meeting covering digital assets, leases, the statement of cash flows, business combinations and financial instruments. The Boards discussed how standard-setting could improve information for investors while managing cost and complexity for preparers across topics. The discussion did not indicate final decisions, but it highlighted areas where targeted improvements, disclosures and continued coordination may shape future activity under both IFRS® Accounting Standards and US GAAP.

Digital assets were discussed through the lens of ongoing FASB initiatives, including the classification of stablecoins, the treatment of wrapped and receipt tokens, and derecognition of crypto asset transfers. The discussion emphasized characteristics such as contractual redemption rights and highly liquid backing reserves. The FASB, in August 2026, issued an Exposure Draft to clarify when certain stablecoins can be considered cash equivalents and has proposed expanding the scope of its existing crypto assets guidance to include tokens that convey rights to underlying crypto assets. That expansion is intended to address diversity in practice and operational complexity. Separately, the FASB is evaluating whether current derecognition models, which rely on control concepts from revenue guidance, require crypto-specific clarification.

For IFRS Accounting Standards stakeholders, the discussion suggests continued monitoring rather than immediate convergence. The IASB expressed interest in the FASB’s developments but also expressed uncertainty about the prevalence of digital assets across global markets and the appropriate prioritization of standard-setting resources. The IASB’s comments indicate a more cautious approach to further standard-setting in this area.

The IASB provided an update on its post-implementation review of IFRS 16, Leases. Stakeholder feedback was generally positive on the standard’s objectives and improved transparency, particularly from bringing leases onto the balance sheet. However, stakeholders also emphasized that implementation and ongoing costs were significantly higher than expected.

Those costs were attributed to complexities in areas such as discount rates, lease modifications and global system requirements. Both Boards acknowledged that costs related to remeasurements and maintaining lease data across jurisdictions remain a major concern. They also noted that current systems still require manual interventions.

In response, the IASB is exploring targeted simplifications, including reduced frequency of remeasurements and simplified discount rate approaches. At the same time, the discussion emphasized maintaining overall convergence with US GAAP. Stakeholders broadly urged the Boards to avoid fundamental changes given the effort already invested in implementation. That feedback reinforces a preference for stability and incremental improvements rather than a wholesale reconsideration of the leasing model.

The Boards also discussed feedback on their respective cash flow statement projects. Stakeholder views were mixed, ranging from calls for targeted improvements to suggestions for complete redesign or no change. Investors continued to support enhancements such as greater disaggregation, improved disclosures and better linkages across financial statements.

A significant issue discussed was the limited usefulness of the statement of cash flows for financial institutions. Feedback indicated that investors do not rely on the statement for banks and similar companies, while preparers highlighted high preparation costs. Both Boards are exploring alternatives, including targeted disclosures focused on key metrics such as cash interest flows.

The discussion also raised broader questions about the purpose of the statement of cash flows. Those questions included whether the cash flow statement should evolve toward a ‘cash earnings’ measure and whether current operating, investing and financing classifications remain fit for purpose. The IASB also noted that, rather than defining a standardized free cash flow metric, entity-specific cash flow measures could potentially be communicated through a framework similar to Management Performance Measures (MPMs) requirements in IFRS 18, Presentation and Disclosure in Financial Statements, with reconciliation back to an IFRS-defined cash flow measure. During the discussion, preparers highlighted that improvements to IAS 7, Statement of Cash Flows, may need to balance increased disaggregation with the cost of producing information that investors use.

The Boards discussed ongoing challenges in accounting for business combinations and related topics. These included the distinction between business combinations and asset acquisitions, as well as the subsequent accounting for goodwill. Stakeholders highlighted that limited guidance on asset acquisitions has resulted in diversity in practice. The source noted that such transactions have become more prevalent following the FASB’s 2017 amendments narrowing the definition of a business under US GAAP.

The long-standing debate between goodwill impairment and goodwill amortization also continued. Feedback indicated that both approaches have limitations and cost implications.

The IASB also discussed proposals to enhance disclosures on post-acquisition performance. Those proposals are aimed at helping investors assess whether acquisitions deliver expected value. However, concerns were raised about cost, auditability and the appropriateness of including forward-looking information in financial statements. Overall, the discussion reflected tension between improving investor transparency and managing preparer burden. For companies applying IFRS 3, Business Combinations, the discussion points to the continuing importance of acquisition-related disclosures, while also highlighting concerns about how far financial statement disclosures should go in explaining post-acquisition performance.

The Boards addressed several financial instrument topics, including debt modifications, hedge accounting and liabilities versus equity classification. Stakeholder feedback indicated that existing US GAAP guidance for troubled debt restructurings and modification accounting is complex and may not provide decision-useful information. That feedback prompted the FASB to consider more principles-based approaches and potential elimination of existing models.

Hedge accounting was also discussed. The FASB is pursuing a phased approach that includes short-term improvements and research into a broader model aligned with risk management activities. The IASB is conducting a post-implementation review of IFRS 9, Financial Instruments.

The Boards also discussed separate initiatives aimed at simplifying equity classification and the indexation guidance. Although the initiatives differ in scope, both are intended to reduce complexity and improve consistency in practice. Across the financial instruments discussion, there was broad agreement on the need to balance simplification with meaningful economic representation, often with increased reliance on enhanced disclosures.

The June FASB/IASB discussions did not signal immediate decisions but highlighted where standard-setting may evolve next. Across digital assets, leases, cash flows, business combinations and financial instruments, the Boards are focused on improving investor information while managing cost and complexity. Companies should monitor targeted simplification proposals from post-implementation reviews, potential developments in statement of cash flows reporting – including the role of cash flow information for financial institutions and broader questions about the purpose and structure of the statement. They should also monitor business combination accounting and disclosure proposals, a potential shift in approach to accounting for certain financial instruments and other investor-focused initiatives.