A study conducted by experts from brand consultancy Intangible Business
showed that five years after the inception of SFAS 41, the US equivalent of IFRS
3, companies that were following the standard were accounting for large chunks
of a deal’s value as goodwill, when they should instead have been accounting
for the components as intangibles such as brand value and other assets.
The vague accounting treatment means that companies may not know how much the
companies they are buying are really worth.
Intangible Business director Thayne Forbes said: ‘The overstatement of
goodwill and the under-reporting of intangible assets is a common theme between
IFRS 3 and SFAS 141.
‘Sadly, there has been no improvement after five years of SFAS 141’s
implementation, which does not bode well for IFRS 3.’
IFRS 3 is built on the premise that a company makes acquisitions based on
fair values and that, in many cases, book value may not be equal to fair value.
Further, the standard also recognises and assigns values to assets and
liabilities which may not be reflected on the balance sheet of the company being
SEC warns against localisation of IFRS
The US Securities and Exchange Commission has hit back at accounting
regulators around the world who have tailored IFRS to suit their local markets.
‘Regulators must beware the impulse to develop nationally tailored versions
of IFRS,’ said SEC chairman Christopher Cox at a corporate governance conference
‘We must co-operate with one another in implementing a set of standards that
is faithfully and consistently applied,’ he added.
Concerns have increased recently with the EU pushing to have the SEC accept
its version of IFRS. Cox, however, cautioned against preserving national
differences in accounting standards.
‘In some cases, convergence and harmonisation are the best approach. In other
cases, an intentionally different national approach is best; and sometimes
simply offering investors a choice after full disclosure is the way to go,’ he
Gittins wins Begbies AGM vote as FD
Shareholders have rubber-stamped the appointment of John Gittins as Begbies
Traynor’s new FD.
Gittins was most recently FD of Vertex Data Science between 1999 and 2007 and
before that was group FD of UK support services company Spring Group, which he
joined in 1993.
Graham McInnes, who has been FD since Begbies floated on AIM in September
2004, will remain on the board, but will take on the new role of corporate
Begbies chairman Ric Traynor said: ‘Graham McInnes’ move, to concentrate his
considerable knowledge on corporate development, will create opportunities for
Begbies to continue to grow the range of services we can offer to our clients.’
Improvements to cashflow statements are being targeted in a consultation launched by the Financial Reporting Council (FRC)
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Long-serving PwC director Fiona Westwood has moved to Smith & Williamson and stepped up to partner