G-20 Calls For Convergence By June, 2011 - UPDATE 2

(Sept. 29, 2009 - UPDATE 2: Based on more detailed information in G-20 Progress Report dated Sept. 25, it appears to me, personally, that the G-20 call for convergence by June, 2011 relates to convergence, generally (e.g., FASB-IASB MOU). Read our Sept. 29 post for more info.)

(Sept. 27, 2009- CORRECTION/UPDATE 1: Although para. 14 in the G-20 Leaders' Statement spoke generically of a call for accounting standards setting bodies to "complete their convergence project by June, 2011," upon further contemplation, I believe that statement may specifically relate to the convergence projects on financial instruments, off-balance sheet transactions, valuation and impairment - rather than 'convergence' generally - if it is implying the specific convergence projects cited in para. 6 of the G-20 Finance Ministers' Declaration issued on Sept. 5. (An alternative interpretation, closer to my original interpretation, is the G-20 was calling for completion of the FASB-IASB MOU by June, 2011; the MOU currently specifies "2011" but not "June, 2011.") Copied verbatim below are the paragraphs in question.)

G-20 Leaders Statement, Sept. 25, para. 14 (note there are 2 sets of numbered paragraphs, this is para. 14 in the second set of numbered paragraphs which follows para. 1-31):

"14. We call on our international accounting bodies to redouble their efforts to achieve a single set of high quality, global accounting standards within the context of their independent standard setting process, and complete their convergence project by June 2011. The International Accounting Standards Board’s (IASB) institutional framework should further enhance the involvement of various stakeholders."

G-20 Finance Ministers and Central Bank Governors Declaration Sept. 5, para. 6

"6. Convergence towards a single set of high-quality, global, independent accounting standards on financial instruments, loan-loss provisioning, off-balance sheet exposures and the impairment and valuation of financial assets. Within the framework of the independent accounting standard setting process, the IASB is encouraged to take account of the Basel Committee guiding principles on IAS 39 and the report of the Financial Crisis Advisory Group; and its constitutional review should improve the involvement of stakeholders, including prudential regulators and the emerging markets.")

I am seeking some form of official clarification as to the exact scope of para. 14 in the Sept. 25 G-20 Leaders' Statement and I will update this post if I receive such information.

Our original Sept. 26 blog post follows.

In a communique published by the G-20 at the conclusion of their Summit meeting held Sept. 24-25, 2009 in Pittsburgh, PA, (see Leaders Statement: The Pittsburgh Summit), the G-20 called for a redoubling of efforts to achieve a single set of high quality global accounting standards, and for completion of convergence projects by June, 2011.

It is interesting to see the reference in the G-20 statement to a 'single set' of standards (which implies, for all intents and purposes, worldwide adoption of International Financial Reporting Standards, since over 100 countries including the entire EU are now on, or moving to adopt, IFRS, with Canada slated to adopt IFRS by 1/1/11) as well as the G-20 statement's reference to 'convergence' (which implies to some people a 'common' set of standards, but not necessarily a 'single' set of standards).

With respect to the U.S., various news sources reported last week that in the Q&A session following her prepared remarks at Georgetown University, that SEC Chairman Mary L. Schapiro indicated the SEC would formally revisit its proposed IFRS roadmap 'this fall.' More specifically, according to Sarah Lynch of Dow Jones Newswire, in her article, Schapiro Says SEC Will Discuss Transition to IFRS This Fall:

Schapiro signaled Friday [Sept. 18] the issue of switching from using U.S. generally accepted accounting principles to a global standard, however, is still very much on her agenda. "It would be ideal if we can have a single set of high-quality accounting standards that worked globally. The reason for that is it would allow for comparability for very large companies in particular and give investors the ability to make comparisons around the world," she said. "I expect we will speak a little later this fall about what our expectations are with respect to IFRS," she added.

On the subject of IFRS, Tom Selling posted in The Accounting Onion on Friday: First Missive From the New Chief Accountant: Get Ready To Roll With IFRS.

Getting back to the G-20 Summit, additional highlights from the G-20 Leaders Statement can be found in this FEI Summary. See also wider coverage of the G-20 Summit by Ellen M. Heffes, Editor-in-Chief, Financial Executive Magazine in Financial Executive Magazine Reports From G-20.

Also, see our related blog posts:
Lynn Turner Speaks Out On Financial Regulatory Reform, and
Monitoring Board Issues Statement Of Principles

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