The invitation to Sir David Tweedie, chairman of the International Accounting Standards Board (IASB), to speak at last Tuesday’s meeting of the EU Economic and Financial (Ecofin) Council could have led to a significant setback to the G20’s aim of global convergence towards a single set of accounting standards.
In the end, and if you read the summit’s conclusions and associated media coverage, everything turned out alright. Sir David outlined the IASB’s plans to reform IAS 39 and the finance ministers, after no doubt some strong debate and discussion, were happy with the timeline that the first elements would be ready for use by the end of 2009.
What this whole episode has done is put the global accounting standards project on the map. There are far more politicians and journalists with an understanding of IFRS and the IASB than there were twelve months ago. That argument over one standard amongst so many could threaten to jeopardise the whole project is a lesson for us all, particularly the IASB.
The prize of a single set of global financial reporting is still there to be grasped. Much progress has been made over recent years, with the EU leading the way. I’m sure that this won’t be the last argument over the details of IFRS. However, I hope what the experience of the last few months has taught everyone involved in the process of standard setting – accountants, investors, regulators and governments - that it is not an easy thing to do and takes time. And when we do have differences of opinion, engagement and discussion at the earliest opportunity are the best way to resolve them.