Future of IFRS: More Judgment By, and of, the CFO

by Cesar Bacani, 09 July 2012

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topics:
Accounting and Regulations

tags:
goodwill IFRS intangible assets valuation

“Whatever the coming years may bring, a period of calm they will not be,” declared Hans Hoogervorst, the chairman of the International Accounting Standards Board (IASB) in Amsterdam on 20 June. “It is our job to push back the grey areas in accounting as far as possible.”

With his address, Hoogervorst put everyone on notice that a quickened pace in IASB’s standard-setting may be in the offing. The retirement of Sir David Tweedie as chairman last year had caused some to speculate that the Board will slow down as the new leadership re-evaluates priorities.

The 2012 work programme the Board put out seemed to signal as much. The focus was on four remaining convergence projects with the US Financial Accounting Standards Board (FASB) – on IFRS 9: Financial Instruments, revenue recognition, leases and insurance contracts.

Aside from those four items, accounting firm Grant Thornton noted in April, “the IASB finds itself with a relatively clean slate for the first time.”

But Hoogervorst (pictured) has now indicated that the Board will move on goodwill, net income and other comprehensive income, and a new Conceptual Framework, among other issues.

“We should improve the significance of the quantitative outcome of our standards where possible,” he stressed. “Where this is impossible, we should make this clear and put more emphasis on qualitative information.”

What’s Coming Up

The IASB released its revised work plan for 2012 at the end of March (see table below), which Grant Thornton described as “an important resource for companies wishing to plan ahead for their future financial reporting requirements.”

Click image to enlarge

In addition, the Board also plans to undertake “post-implementation reviews of both IFRS 3: Business Combinations and IFRS 8: Operating Segments,” reports Grant Thornton, which judged the work plan as indicative of a “slowdown” in IASB activities.

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