IASB Chairman's report

Date recorded:

Hans Hoogervorst referred to the formal review of the IASB’s work prepared by Sir David Tweedie and said that his comments would be forward-looking. Hans was confident that the US decision on the use of IFRSs in the US for domestic issuers would be a positive one: in his view, the US can only delay but they cannot avoid using IFRSs. Currently, 2/3 of the G20 countries use IFRSs and the momentum towards full adoption in the final 1/3 is ‘unstoppable’.

He noted that he and Ian Mackintosh were working well together and had found a useful division of labour – noting that Ian had a ‘good eye for what is needed to strengthen’ the organisation.

He repeated two points from his presentation to the Monitoring Board on 13 July:

  • Work to complete the major projects would continue, but the Boards were committed to producing high-quality outcomes and would not compromise that for deadlines. The Boards had agreed to re-expose the proposals on Revenue even though they did not think the re-exposure triggers had been met. However, given the pervasiveness of revenue recognition issues, they thought the additional comfort of re-exposure was worth it. On leasing, the Boards did not yet have a converged solution and would have to consider re-exposure once they had concluded their redeliberations. On financial instruments, achieving agreement on impairment was very challenging: the financial crisis forced solutions on the IASB and FASB that had driven the boards apart. He hoped that a ‘substantially converged’ solution could be achieved.
  • Referring to the Agenda Consultation, he noted that there were many ‘open questions’ and asked for real and honest input on how to deploy the IASB’s resources, However, the document would not be wholly neutral: completion of the Conceptual Framework and conducting post-implementation reviews of recent IFRSs was necessary and a persistent request from constituents. In addition, issues identified by recent adopters of IFRSs, particularly in Asia, were likely to feature, e.g., foreign currency translation and aspects of agriculture.

Hans and Ian answered questions from the Trustees.

  • The meeting schedule between now and when the major projects were completed was likely to be intense, similar to that in the first half of 2011.
  • Some Trustees suggested that it would ‘be wise’ to err on the side of re-exposure of the major projects. He realised that this would delay issuing the Standards, and would give an opportunity to those who did not agree with the IASB’s answer to re-hash their opposition, but that might be the best option in the circumstances.
  • ‘Variants’ in IFRSs continued to trouble some of the Trustees. The IASB should seek to obtain hard data on such variants – there were too many ‘reckless comments’ in the press that were unsupported. There is a need to clarify which jurisdictions were doing something other than ‘IFRSs as issued’, understand why that was so and get the facts out in the open.

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