It is a year since Hans Hoogervorst took over as Chairman of the IASB. It has not, through no fault of his own, been an easy time. The difficult story of economic disruption continues to be told by financial reporting around the world. Last year, in our coverage on IAS Plus of his arrival and first actions, we suggested that they showed where the accounting high ground of the future would be situated. ‘It was not going to be in the field of arcane technical matters, which only the technocrats would comprehend and then argue over them for months and years’. Instead, we said: ‘The Hoogervorst future is at the heart of the widest economic and business issues. The global stature of the IASB will be reinforced further and take its place at the table where it will become even more obvious that financial reporting is at the heart of economic progress’.

And across the last few weeks we have had discussions amongst the IASB’s Advisory Council, a speech from the Chairman of the Trustees, Michel Prada, and one from Hoogervorst himself, taking a wider view of what he termed: ‘the imprecise world of accounting’.

The first decade of the IASB was an enormous achievement, as Prada pointed out, but, inevitably, it was a time of building the structure fast and relying often on what could be achieved in the short-term, rather than what might in the long term be more useful. And it was also a time when the global economy woke up to the implications of quite what a universally applied financial reporting regime might mean. Many people in the policy-making world found themselves wrong-footed. They had taken the traditional attitude. Hoogervorst explained this in his Amsterdam speech the other day. ‘Accounting should be the most straightforward of topics for policy-makers to deal with. Accounting is mainly about describing the past – to reflect faithfully what has already happened’, he said. ‘This should be dull business, best left to “bean-counters”. Surely counting beans cannot cause too many problems?’

That has been the traditional attitude for years amongst policy-makers. ‘Yet, over the years’, said Hoogervorst, ‘many securities regulators have told me of their surprise upon finding out that accounting policy is one of the most difficult and controversial topics to deal with. It is the same around the world. Just ask the Japanese FSA, the US SEC, or the European Commission’.

Part of this surprise is the under-estimation of the implications of good financial reporting. Hoogervorst quoted his predecessor, Sir David Tweedie, that it was the job of accounting to keep capitalism honest. And the second issue was ‘the inescapable judgement and subjectivity of accounting methods’. ‘Put simply’, he said, ‘there is a lot to disagree about’.

And there are. He ran through examples involving measurement techniques; the rise in importance of OCI, the place where the ill-defined but very important jumble of ‘other comprehensive income’ is put; intangible assets, and more. This is the technical detail which can be, and is argued about incessantly. But as the IASB has matured it has become the underpinning of a grander and more global purpose. ‘We should concentrate on further improving the quality of our standards’, said Hoogervorst. Principles, pragmatism and persistence were his watchwords. In Prada’s speech he said that Hoogervorst’s words in Amsterdam ‘remind us of the fundamental objective and of the intrinsic complexity of accounting and financial reporting: to provide those market participants who do not have direct access to basic data with a true and fair representation of the situation and performance of companies that they invest in or deal with’.

The last year has also seen much effort and work put in by the Trustees and the Monitoring Board to safeguard and ensure the independence of the standard-setting process and to place it within a clearly defined framework that should deliver public accountability and robust governance structures. ‘Accounting standard-setting’, Hoogervorst emphasised, ‘should be sensitive to legitimate business concerns, but should also be firm and independent in the face of special interests’. Testing the ground and understanding the impacts of the accounting proposals is an important part of delivering robust standard-setting and achieving global buy-in for IFRS.

The year has also seen great efforts at encouraging the creation of regional bodies around the world to expand discussion and act as a conduit for views. As Prada put it: ‘The benefit will be better integration of the global perspective into the standard-setting process and perhaps a reduction in the risk of non-endorsement of a new standard’.

Put all of these measures together and you are left with little doubt that the IFRS process is starting to come of age.