Tweedie nearly quit after fair value change

Sir David Tweedie considered stepping down from his position as the head of
the IASB after effectively being forced to allow the reclassification of hard-to
value financial assets, he admitted at a Treasury committee meeting earlier this

When asked whether he had considered resigning Sir David he said that he had
but was determined to help achieve a single set of accounting standards. ‘We’re
almost on the verge of winning the international project. I would hate to walk
away at this stage.’

Sir David said that the IASB took the drastic move without the usual due
process involving a consultation period because the threat posed by an EU
carve-out would have totally derailed convergence efforts.

‘If the EU had done another carve-out then the US would have said this is
impossible. That would have crippled the whole global process. The European
commission said that the legislation to implement the carve-out was all ready to
Accounting in Europe would have been totally out of control if they had managed
to push through the carve-out.’

Flanked by FRC chief Paul Boyle and ICAEW chief executive Michael Izza,
fielded a series of tough questions which included accusations of the IASB being
‘spineless’ and ‘caving in’ by allowing reclassification of certain assets but
Tweedie said that the alternative would have been far worse.

Paul Boyle added that this was a key juncture for convergence efforts:
‘We could look back on this as the year that the dream of global accounting
standards was killed, or it could be the year we saw the rules made more robust.
The jury’s still out.

Sir David said the proposed carve out would have lifted restrictions on
taking financial instruments out of their usual trading categories: ‘You could
have put them anywhere. It would have been a total free –for-all.’

Speaking to Accountancy Age after the meeting Sir David said the
political pressure brought to bear on the IASB to suspend fair value had been
‘regrettable’. He added: ‘We’re not going to be pressured into rushing something
through again.

Further reading:

accounting rule pushes Deutsche Bank into profit

reclassification helps Schroders avoid £49.9m loss

Related reading

Fiona Westwood of Smith and Williamson.