IASB's Sir David Tweedie 'optimistic' on convergence: International Accounting Standards Board Chairman Sir David Tweedie remains optimistic about convergence. Now, in the third year of his five-year term, he speaks with Financial Executive's Managing Editor Ellen M. Heffes about progress to date, sticking points and what he'd still like to see happen.

• Author: Heffes, Allen M.
• Position: Global News - International Accounting Standards Board - Interview

You spoke with us a year ago, extremely optimistic about convergence--with IASB, FASB and other country accounting standard-setters. How would you now describe your position on convergence?

Tweedie: I am still optimistic. A document was just released (December 15) by FASB, changing four of its standards to move in Line with ours; we've already issued one to move in line with FASB, and another is coming. The standards include business combinations and impairment. FASB is also looking at IPR&D and the fact that it is written off instantly on an acquisition; they're thinking of not doing that; and also prohibiting certain types of acquisition provisions.

We are all trying to head to the same answer. As for share-based payments [stock options], we are going ahead of the U.S., but we are in close contact with FASB. We'll probably be going into standard just as they go into Exposure Draft (ED). But, we have agreed that if there are differences, they will show what we have proposed and ask a question on it. Similarly, if the ED changes or is different from our standard--by the time it becomes a standard--we'll re-debate the issues [and] change our standard, if we don't like the answer. The idea is that we both have the same standard in 2005.

There is a good atmosphere between the two boards, and we've agreed to meet twice a year now--the next meeting is in April in London. Also, we've set up an Agenda Committee to work on getting our two agendas together, to work on the same projects--so we don't end up creating new differences.

So joint meetings, agendas, getting rid of the differences between the standards--that's all going on. It is going well; as good as we can expect. We [at IASB] will be able to spend more time now because we've been sort of going flat-out for the Europe 2005, with March 2004 our deadline. That frees up a lot of time to look more closely at convergence.

How difficult is it for you, dealing with the IAS 2005 deadline and convergence issues, concurrently?

Tweedie: We firmly believe that we shouldn't have two different ways of accounting for the same transaction. If we have a major difference, then we have to sit and debate it until we decide which one is the right one. And we have to go into it honestly and fairly, with an open mind and willingness to change. If it doesn't matter, quite frankly, we can toss for it, as long as we are at the same answer. We did that for one of the business combination issues. One board had one answer and one board...