Report of the Financial Crisis

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Financial Crisis Advisory Group
July 28, 2009

To the Members of the International Accounting Standards Board and the US Financial Accounting Standards Board:

On behalf of the members of the Financial Crisis Advisory Group (FCAG), we are pleased to present our report to the Boards about the standard-setting implications of the global financial crisis. We believe that confidence in the transparency and integrity of financial reporting is critically important to global financial stability and sound economic growth. We hope that our conclusions and recommendations will be helpful to the Boards as they work together to simplify and improve accounting standards on financial instruments and other key areas highlighted by the crisis.
The FCAG will be meeting in December to review the progress that has been made. In the meantime, we are available to assist the Boards in their efforts.
Sincerely,

Harvey J. Goldschmid
Co-chair

Hans Hoogervorst
Co-chair

cc: Gerrit Zalm, Chairman of the Board of Trustees,
International Accounting Standards Committee Foundation
John J. Brennan, Chairman of the Board of Trustees,
Financial Accounting Foundation

Report of the Financial Crisis Advisory Group – July 28, 2009

Table of Contents
Page
I. INTRODUCTION _________________________________________________________________________ 1
II. PRINCIPLE 1: Effective Financial Reporting____________________________________________________ 3
Intersection of Prudential Regulation with Financial Reporting ___________________________________ 6
Recommendations _____________________________________________________________________ 7
III. PRINCIPLE 2: Limitations of Financial Reporting _______________________________________________ 9
Recommendations ____________________________________________________________________ 10
IV. PRINCIPLE 3: Convergence of Accounting…...

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