Tommaso Padoa-Schioppa was the Chairman of the IFRS Foundation Trustees until he passed away in December 2010. Mr Volcker, who was recently called "the greatest central banker of all time" by incoming IASB Chairman Hans Hoogervorst, was chairman of the US Federal Reserve 1979 to 1987; he retired from his post as chairman of the US Economic Recovery Advisory Board under President Obama last month. Click for Mr Volcker's speech (PDF 15k, link to IASB website).

 

A new publication, Directors' Alert: 11 Issues for 2011 – Ever-increasing demands, discusses boards' responsibilities around involvement in organisational strategy, and oversight and management of risk. Consistent with similar themes in an earlier story, in discussing regulatory change, the ever-growing reach of IFRS is identified as a key consideration and opportunity.

An extract:

...a growing number of jurisdictions are moving to International Financial Reporting Standards as standard setters such as the FASB and IASB seek to harmonize financial reporting around the globe. While compliance with these rules is obviously important, organizations will distinguish themselves by taking a "beyond compliance" approach and determine how regulatory changes can create competitive advantage. This is particularly important if changes have the potential to affect the organization's strategy, supplier relationships, customer expectations or other market behaviors that may affect the organization's growth or ability to attract investor capital.

Click for Directors' Alert: 11 Issues for 2011 – Ever-increasing demands (PDF 470k).

Differences exist between IFRS and U.S. GAAP relating to hedge accounting. The revisions proposed by the IASB in ED/2010/13 Hedge Accounting would result in more differences compared with the FASB's current and proposed hedge accounting guidance (as outlined in proposed Accounting Standards Update, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging ActivitiesFinancial Instruments (Topic 825) and Derivatives and Hedging (Topic 815)). The FASB Discussion Paper asks stakeholders whether the IASB's proposals are a better starting point for any changes to U.S. GAAP as it relates to derivatives and hedging activities.

Click for:

• FASB press release (link to FASB website)
• Heads Up Newsletter (PDF 216k) on the FASB's original proposals
• Our summary of the IASB's hedge accounting project.

 

Please click for the updated agenda.

 

Global publications

• Impairment of financial assets: A closer look at how the IASB and FASB considered feedback (PDF 128k) – provides a closer look at how the IASB and FASB considered constituent feedback on their original impairment exposure draft in developing their recently issued supplementary document Financial Instruments: Impairment.

Deloitte (Colombia)

• IASB emite enmiendas al IAS 12 (PDF 231k) – a Spanish translation of IFRS in Focus: IASB issues amendments to IAS 12

Deloitte (Korea)

• IFRS in Focus – IASB issues amendments to IFRS on removal of fixed dates for first-time adopters (Korean translation, PDF 213k)
• IFRS in Focus – IASB issues amendments to IAS 12 (Korean translation, PDF 299k)

Deloitte (United States)

• CFO Insights newsletter: Will IFRS trip up your debt covenants? (PDF 107k)

 

According to Mr Haddrill investors must be given more information about the prospects of the company and a better picture of the future of the business and of the judgements made in the course of the preparation of the financial statements.

Here is an extract:

In short, we want investors to learn about the business and its future from the directors; we want the directors to say more about the things that really keep them awake at night; and we want to empower auditors to challenge management by requiring them to say whether the Board have really given a balanced and fair view on these matters as well as on the accounts. [...] And we need an audit profession that [...] is not afraid to challenge management. One that is sceptical of assertions made without apparent good foundation – that does not see its role as confirming management's view, but identifying the truth.

Click for:

• FRC press release (link to FRC website)
• Full text of Mr Haddrill's speech (PDF 69k, link to FRC website)

 

While the IASB technical staff will remain based in London, the establishment of the Tokyo office will expand opportunities for direct contact between the IFRS Foundation and its stakeholders in the region.

Tsuguoki (Aki) Fujinuma, one of the vice-chairs of the IFRS Foundation Trustees stressed the importance of having a liaison office in a region with many jurisdictions moving toward IFRSs: "This important announcement reflects a strong regional commitment to international standards, and the need for the views of Asia-Oceania stakeholders to be adequately considered during the IASB's decision-making process. Adoption of IFRSs is widespread in Asia-Oceania."

In his speech given in Brussels yesterday, Hans Hoogervorst, future chairman of the IASB, also stressed the need to strengthen the IASB's outreach activities: "Still, we need to build on existing outreach efforts to ensure that participants around the world are heard and their views given due consideration by the Board. The opening of a regional office in Japan is an important step in that direction."

Please click for IFRS Foundation press release (PDF 35k).

His term begins immediately and expires on 31 December 2013. Mr Sluimers is Chief Executive Officer of APG Group, a Dutch-based provider of asset management, administration and communication services for pension funds. Please click for IFRS Foundation press release (35k).

 

In his speech, Mr Hoogervorst discussed "to which audience financial reporting should primarily be directed" and whether accounting standards should only serve the goal of transparency, or should they have a "financial stability objective". During his discussion on the role of accounting standard setters in creating transparency and stability, he stated:

So accounting standards can make a very important contribution to stability by providing maximum transparency, and by avoiding artificial noise. However it is important to keep this in perspective. Stability should be a consequence of greater transparency, rather than a primary goal of accounting standard-setters. For this, accounting standard setters simply lack the tools. For example, they cannot set capital requirements for the banking industry. This instrument belongs to the prudential regulators who do have stability as their main mission. What accounting standard setters can also not do is to pretend that things are stable which are not. And, quite frankly, this is where their relationship with prudential regulators sometimes becomes testy. Accounting standard setters are sometimes suspicious that they are being asked to put a veneer of stability on instruments which are inherently volatile in value.

Click for text of speech (link to IASB website).

In line with other responses GRI states that companies' stakeholders, including directly affected communities and the public at large, need comprehensive and credible information on corporate social and environmental impacts to identify problems with and monitor progress of the companies they deal with. GRI observes that the current system does not create a level playing field among business, as in most EU countries reporting by companies on their non-financial impacts is voluntary. Yet GRI also warns that the European Commission need not "reinvent the wheel" since there already are "guidelines that enable all companies and other organizations to produce comparable reports on their sustainability performance". According to GRI what is needed is mandatory application, not new standards.

Click for:

• GRI press release (link to GRI website)
• Our sustainability reporting page