Norwalk Agreement, 2002 and its Recent Updates with Reference to IFRS
The International Accounting Standards Board and the Financial Accounting Standards Board are the two most significant Accounting bodies of the world. Although the convergence of IASB and FASB seems to be inevitable, there are mixed opinions on the issue. It was in 2002 that the IASB and FASB signed a memorandum of understanding in Norwalk, Connecticut, USA. This MOU is popularly known as the “Norwalk Agreement, 2002”. Through this agreement, the IASB and FASB pledged to use their best efforts to (a) make their existing financial reporting standards “fully compatible as soon as is practicable” and (b) coordinate their future work programs for ensuring that the compatibility is maintained. “Fully compatible” was generally understood to mean that compliance with U.S. GAAP would also result in compliance with IFRS. But even on completion of 16 years after the MoU, the question arises as to whether at all there will be any convergence between IASB and FASB, or whether IFRS will be merely a distant vision for the USA.
This paper plans to make an intensive study of the Norwalk Agreement, 2002 and its Recent updates with reference to IFRS keeping in mind the queries as stated above.
Keywords - IASB, FASB, IFRS, US GAAP, Convergence, Norwalk Agreement, 2002.