With an admission that maybe they’ve bitten off more than they can chew, accounting rulemakers have decided to take a break from two separate projects that once appeared prominently on their priority list for converging U.S. and international accounting rules.

The Financial Accounting Standards Board and the International Accounting Standards Board met in a joint session last week to make progress on a number of major initiatives to revise both U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. They agreed they’ve stretched their respective staffs to capacity and can’t proceed any further on a long-running effort to revise the overall presentation of financial statements, nor with a project to better define how to treat financial instruments that look and feel a lot like equity.

Although the boards have issued a staff draft of a standard to overhaul the entire format of financial statements, they decided they won’t go forward with their original plan to publish a formal proposal in the first quarter of 2011. “The financial statement presentation project team will continue to work on outreach, and how the proposals may be modified, but they won't be doing any more board work for now,” said FASB spokesman Christine Klimek.

The staff team has been working with various constituent groups to get feedback on how the proposed format for financial statements would work in practice. Staff members reported to the boards that constituents have raised a number of issues through that outreach process that the boards should address. “We’re now getting a lot of different feedback that will cause a certain amount of pause,” said FASB member Larry Smith during the boards’ joint meeting. “And it will be appropriate to do so with a project that could be as costly as this one to implement.”

FASB Acting Chairman Leslie Seidman said she has her doubts about whether the financial statements presentation standard in particular can get its due attention, given a higher priority the boards have placed on a handful of other projects to complete by June 2011. “I’m concerned this analysis might get short shrift from us if we endeavor to do it in the first quarter,” she said.

The boards also acknowledged they don’t have the capacity to continue working on how to treat financial instruments that have characteristics of equity, a project listed with the financial statement presentation project as a priority when the boards updated their memorandum of understanding in late 2009. As such, they’ll suspend board work for now and will hold off their plans to publish an exposure draft of a proposed standard.

FASB and IASB said they expect to resume both projects after the targeted June 2011 completion date of at least three other major priorities—financial instruments, where boards are trying to reconcile radically different views on how much fair value should be required, revenue recognition, and leases. Some board members also cited a project on insurance contracts as a near-term priority, although it is not mentioned in the 2009 convergence agreement.