In his remarks Mr. Restoy talked about convergence, the governance structure of the IASB, and the link between the objectives of accounting and those of other regulations, notably prudential regulation. The major part of his speech was devoted to the third topic, namely the reporting of changes in fair value. In contrast to the recent debate, Mr. Restoy argued that the issue was less whether or not to report something at fair value, but rather where the changes in fair value should be reported: in profit or loss or in other comprehensive income. In his view, much of the pressure that was exercised on standard setters during the financial crisis was due to regulators not accepting some changes in fair value to be presented in profit or loss. To avoid such pressure in the future he argued in favour of the IASB moving towards a single statement of comprehensive income without prescribing subsections. By doing so the IASB would avoid defining the subsections, mandating which changes in fair value be presented in which section and whether or not recycling was appropriate and why. Here is an excerpt:

[A]n idea that should be explored is to gradually move in the direction of eliminating the current sharp dichotomy within total comprehensive income between P&L and OCI. The standards should rather establish a complete breakdown of income sources including realised or unrealised capital gains of financial or non-financial assets sorted by the valuation hierarchy, but without grouping them, as at present, in two arbitrary categories. Consistent with that approach, the responsibility to define the concept of earnings per share should not lie with accounting standard setters.

The complete speech can be downloaded here (PDF 84k).

The IASB has recently published a proposal according to which an entity would no longer be permitted to present two separate statements of performance, but to combine them into a single statement of profit or loss and other comprehensive income. Click here for the related news story and our IFRS in Focus newsletter. You can find more background information on the IASB's project on comprehensive income on our IAS Plus Agenda Page.