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Philippe Danjou answers 10 misconceptions about IFRSs

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Feb 06, 2013

In an online paper, IASB member Philippe Danjou responds to 10 recurring misconceptions about IFRSs that currently exist, in particular, in continental Europe.

The paper examines 10 misconceptions of IFRSs, which are:

    1. IFRS practise a generalized "fair value."
    2. IFRSs are intended to reflect the global financial value of the company.
    3. IFRSs deny the concept of accounting conservatism.
    4. IFRSs give prominence to economic reality over legal form.
    5. Directors can’t make heads or tails of IFRS financial statements.
    6. The IFRS financial statements do not reflect the business model.
    7. Financial instruments will soon be "full fair value," thereby maximizing earnings volatility.
    8. The "fair value" is always defined as "market value" even when markets are illiquid.
    9. The treatment of business combinations is irrational.
    10. IFRSs create accounting volatility that does not reflect the economic reality.

The views expressed in this paper are the personal views of Mr. Danjou and not the official views of the IASB. The paper is available on the IASB's Web site, initially in French only, with the IASB indicating an English translation will be available soon.

Update

On February 21, 2013, the IASB made available an English translation of the paper.

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