Hans had submitted a written report, and chose rather to confine his oral remarks to more personal observations. He highlighted the inaugural meeting of the Accounting Standards Advisory Forum (8-9 April 2013), describing the two days as ‘a very good meeting’ and one that had a high quality of discussion.

He also mentioned the forthcoming meeting of the IASB’s Effects Analysis working group. This body would assist the IASB develop better quality effects analysis, based on economics of the underlying transactions, leading to better capital allocation.

He noted certain current projects. Revenue and Leases were examples of topics for which the IASB and FASB had managed to achieve convergence on significant topics. On revenue, the FASB had managed to rationalise guidance that was seen as too voluminous and the IASB provide necessary additional guidance. On leases, the revised proposals would bring much of the 20% ‘under-reported balance sheet leverage’ on balance sheet, giving better information to the markets and management.

On IFRS 9, Impairment, he noted that, while the models were not converged, he and his FASB counterparts remained hopeful of coming closer during the post-exposure redeliberations. In this area, Hans asked that securities regulators look carefully at the two models and provide comments to both IASB and FASB.  Prudential regulators were very interested in this proposed standard, but the IASB (and FASB) wanted the specific input of securities regulators. The boards needed to balance ‘good provisioning’ with avoiding any obscuring of true financial performance and actual underlying economics.

A similar plea was made for the IASB’s Insurance projects, where Mr. Hoogervorst noted an unease among many insurance companies as the IASB was proposing to shed greater transparency on insurance measurement issues.

He also noted the work on the IASB’s Conceptual Framework and the constructive role played by the ASAF. The ASAF had, if nothing else, confirmed that the IASB had identified all the difficult issues, including those around measurement, defining performance/ ‘net income’, and the role of other comprehensive income.

Michel Barnier (EC Commissioner for the Internal Market) stressed that, for Europe, completing IFRS 9 was critical and was pleased that discussions post-exposure would be on a joint basis between the IASB and FASB. He welcomed other developments in the IASB’s activities.  He noted the EC’s Green Paper on Long-term Financing of the European Economy, which was intended to stimulate debate on how to improve and diversify financial intermediation in the EU. Mr. Barnier reemphasised the link between high-quality accounting standard-setting and the wider public interest. Mr. Hoogervorst agreed that much of the IASB’s work (e.g., leases and insurance) was aimed at having financial reporting reflect economics, and was thus consonant with the EC’s proposals on long-term capital allocation.