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IASB Chairman indirectly comments on funding suggestions in the provisional ECON report

  • IASB (International Accounting Standards Board) Image
  • European Union Image

Oct 15, 2013

At the meeting of the IFRS Advisory Council currently held in London, IASB Chairman Hans Hoogervorst took the opportunity to comment on the suggestions in the provisional ECON report when talking about the IASB's conceptual framework project and other IASB activities.

The provisional report of the Committee on Economic and Monetary Affairs (ECON) of the European Parliament was made available earlier this month. It recommended an annual assessment of the EU's funding for the IASB and suggested making the outcome of the assessment dependent on certain conditions.

Those funding arrangements depend on whether the IFRS Foundation and IASB implement the proposals of the Union regarding their governance; whether the Union accounting concepts, in particular with regard to 'prudence' and the requirement for the 'true and fair view' are appropriately considered in the revision of the Conceptual Framework; whether the IASB decides not to include those concepts in the revised Conceptual Framework; and whether the IASB provides reasons for its decision, including publishing the details of the jurisdictions, non-governmental organisations, undertakings or other stakeholders, which objected to those concepts.

When updating the Advisory Committee members about the IASB's activities, Mr. Hoogervorst referred in passing to the provisional ECON report and the technical issues that are suggested as criteria for the funding assessment when he spoke about the IASB's conceptual framework project. In the course of the project there have been calls from various sides to reintroduce the concept of "prudence" and Mr. Hoogervorst acknowledged the discussion in his September 2012 speech on prudence. Referring to the provisional ECON report he commented though that he found it "very difficult to discuss the concept as long as it is tied in to a political discussion." He called tying funding to the outcomes of standard setting "something we cannot accept" and "a threat to our independence" and also warned "if Europe is going to do this, other parts of the world might be encouraged to do so." Chairman Hoogervorst added, however, that he had the impression that the European Commission has also realized that the current situation is "not something to be wished for" and he expressed the hope that the official trialogue now beginning and involving the European Parliament, the Council, and the Commission would have a "positive outcome."

Mr. Hoogervorst's remarks were recorded as part of his update on the IASB's activities and can be listened to on the IASB's Web site (recording ACM – Session1/3).

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