On the long and winding road toward convergence with international accounting standards, the Financial Accounting Standards Board is rethinking how companies should look back at prior periods based on the adoption of new accounting rules.

In its project with the International Accounting Standards Board to achieve short-term convergence on certain rules, FASB plans to require companies to adopt “retrospective application” of new accounting rules, meaning companies must recalculate figures in prior periods as if new rules had always been in effect.

However, the Board decided recently that it would not require retrospective application when a new accounting rule creates only an indirect ...