Dealbreaker RFP

Yesterday the FASB and IASB got together and spent 23 pages convincing everyone that convergence of accounting rules will happen by June 2011. If you haven’t been convinced by the steps one paragraph statement that was issued saying how ‘encouraged’ she is about the latest re-re-affirming.
There is no doubt in anyone’s mind that there will be a single set of accounting rules — for the entire financial reporting universe — rolled out and everything will be right with the world in June 2011.

But will it be a single set of standards? Edith Orenstein of FEI Financial Reporting Blog:

It is interesting to note that the FASB-IASB joint statement speaks in some places of converging to a ‘single’ set of standards, and in other places of converging to a ‘common’ set of standards. To some, these terms can mean a world of difference. However, the terms are often used interchangably by many different parties. For example, here are some excerpts from the joint statement:

We are redoubling our efforts to achieve a single set of high quality standards within the context of our respective independent standard-setting processes.
Our goal is to develop together common standards that improve financial reporting in the US and internationally and that foster global comparability. Achieving such improvements is consistent with the objectives of the IASB that are set out in the Constitution of the IASC Foundation. It also fulfils the responsibility the FASB has under US law and the Securities and Exchange Commission’s 2003 Policy Statement to consider, in developing standards, whether international convergence is necessary and appropriate in the public interest and investor protection.

(emphasis original)
That clears it up, doesn’t it? So it’s either a “single set” or “common standards”? FEI Blog thinks it’s a progression, “Presumably, once a set of ‘common standards’ is acheived, the next step would be to officially adopt one set (again, presumably, IFRS, which is used in over 100 countries) as the ‘single’ global standard.”
While this may be the case it still doesn’t mean that everything will be the same.
CFO:

“Convergence doesn’t necessarily mean the same,” says D.J. Gannon, a Deloitte audit partner and the firm’s expert on international financial-reporting standards. In fact, Gannon says, there is no expectation that any of “the lingering differences” between rules that are already converged will be handled through standard-setting. “So the bottom line is that companies [reporting results under U.S. generally accepted accounting principles] are going to have to deal with those differences if they apply international financial-reporting standards at some point in the future.”

Good lord. So for all practical purposes, it sounds like there will still be differences. Frankly, we’re disappointed in this revelation. If someone had told us from the get-go that it wasn’t going to be 100% the same accounting rules we wouldn’t have made such a big stink about the absolute impossibility of the endeavor. Going forward we’ll be taking this even less serious.
FASB, IASB Reaffirm Convergence By June, 2011 [FEI Financial Reporting Blog]
“Convergence Doesn’t Necessarily Mean the Same.” [CFO]