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IASB Chair's farewell speech to IFASS members

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09 Mar 2021

The spring meeting of the International Forum of Accounting Standard Setters (IFASS) concluded today with a farewell speech of IASB Chair Hans Hoogervorst to his fellow standard setters.

Mr Hoogervorst began his speech with some quips about departing presidents and his intention to leave peacefully. In fact, he noted, there was no need for an armed insurrection of angry national standard-setters as his designated successor, Andreas Barckow, is the former Chair of the German standard-setter and thus really understands what national standard-setters need from the IASB - an insider so to say.

Mr Hoogervorst then looked back over his ten years as Chairman. He noted he was truly proud of what the IASB has achieved during that time: completing reforms following the global financial crisis and delivering major improvements to financial instruments accounting, to revenue recognition and to lease accounting — often in the face of fierce lobbying. In his second term, the IASB focused on improvements to presentation. Not all projects of that phase are finished yet, but all of them delivered or promise progress at making disclosures more relevant.

While mentioning big standards and adoption of IFRSs around the world, Mr Hoogervorst could not help but comment on the adoption of IFRS 17 in Europe and that some parties still hope to limit the scope of the annual cohorts requirement that are intended to insure that contracts cannot continue contributing to profits long after they have expired. His questions were:

  • Is it really worth it?
  • Will European insurers really look good if they apply a carve-out that most investors will view as a short-cut that distorts performance?
  • Is it in the interests of the industry itself to lose the full benefits of applying the same standard across the world?

A bracket around Mr Hoogervorst's speech were the crises at the beginning at the end of his chairmanship. He joined  the IASB with little experience with accounting at a time when the accounting for financial instruments came under attack during the financial crisis. He noted that people were pointing the finger at accounting when the blame was really much closer to home. At that time he was convinced that the criticism of accounting was a typical case of shooting the messenger. Mr Hoogervorst noted that during the COVID-19 crisis and recession the state of the global economy is even more perilious that ten years earlier with debt exploding around the world. He stated that he would not be surprised if accounting comes under pressure again, as it did in 2008, when the economic stress that has been building up finally erupts. But, he noted, that is exactly the point when proper accounting matters the most.

Concluding his speech Mr Hoogervorst thanked the national standard setters and stressed that IFASS was a wonderful example of what can be achieved when highly skilled people from around the globe work together to solve common challenges, which was even more impressive given the anti-globalisation backdrop of the last five years where a politically expedient solution is often valued above the right accounting solution. He asked the standard setters to continue to stand up for independent standard-setting and to give his successor and his team the same support they have given him in the last decade.

Please click to access the transcript and a recording of the speech on the IASB website.

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