IFRS conversion has cost Barclays bank £50m but made its accounts less
transparent, Barclays CFO Naguib Kheraj told Accountancy Age today.
The huge cost of conversion has added to business dissatisfaction about the
new international financial reporting standards, which were made compulsory for
listed companies in Europe from January 2005.
Senior finance and business representatives have already complained that the
clarity of communication on business performance risked being lost in the
complexity of IFRS accounts.
Kheraj agreed with these concerns: ‘We have spent £50m on our IFRS
convergence plan and our results are more difficult to interpret now than they
Derivatives rules have added an extra challenge to the IFRS conversion
process for banks, most of which also have insurance arms to add to the
‘People underestimated how much work was involved, how much it would cost and
the complications of interpreting financial results that have arisen as a
consequence,’ he said.
Kheraj also rejected recent suggestions that banks should pay a windfall tax
on their profits: ‘Arbitrary changes to tax or regulation could result in the UK
being less competitive for the financial services industry.’
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