INTERNATIONAL STANDARD SETTERS the IASB have delivered an optimistic annual report 2010, predicting a return to budgetary balance in 2011 and the completion of outstanding convergence projects before the year is out.
Departing chairman Sir David Tweedie used his swansong to recall the early years of the body, when it had “a tiny office with only a few rooms and a dozen or so staff”.
He said the remaining convergence projects are some of the knottiest, with financial instruments, hedge accounting and fair value measurements still causing head scratching for global and US standard setters.
Despite the value of IASB assets slipping £2m year-on-year, the board seemed little perturbed by finances. It enjoyed a slight increase in contributions, from £16.59m in 2009 to £16.64m in 2010, while publications and related revenues plumped the coffers to the tune of £100k.
Interest revenues fell by £106,000 to £271,000, while expenses rose 5% to £24.1m. Nevertheless, the board was confident that despite the economic downturn and climbing costs, the foundation’s budget will be back on track by the end of 2011.
Next year’s healthier bank balance is expected to come from higher funding through new financing regimes; essentially, this means more generous contributions from members, plus licensing income from countries and professional organisations seeking electronic access to IFRS.
After the financial crisis, IASB focus swung onto related projects like derecognition, with other work sidelined until the completion of these high priority tasks. Income tax and intangible assets were among those that fell victim to “reassessment as a lower priority”. This means the IASB can safely wait until its key tasks are completed and the convergence decision is taken before revisiting more minor responsibilities.
Perhaps this is reason behind the board’s sunny mood? With just three – admittedly testing – standards to complete in the coming months, the IASB at least has a defined task at hand, even if it is an arduous one.
Recent rumbles from US regulator the SEC have been positive, with one of the five top dogs, commissioner Kathleen Casey, urging stakeholders to stop “kicking the can down the road” and saying the body “must decide to incorporate IFRS for US issuers”.
So with one final task to complete, and all signs pointing to positive, the IASB might be looking forward to putting its feet up post convergence. With a little luck, the glare of global interest will subside and its most arduous task will be to tweak existing standards and write uncontroversial new rules – a far cry from the sweat and blood of the last ten years.
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