Corporate dismay as Tweedie lays out fresh IASB reform agenda

Sir David Tweedie, the chairman of the IASB, has laid out the
standard-setter’s plans to reform corporate reporting further, including
overhauling profit measures used by companies.

His remarks, made at an IFRS conference in London today, come as listed
European companies continue to grapple with the introduction of IFRS, which has
revolutionised the way groups prepare their accounts.

According to Reuters, Sir David said the IASB was pursuing further
changes to the way revenues, financial instruments and earnings were reported,
as the IASB pursues its goal of converging IFRS with US accounting standards by
2007.

Among the reforms Sir David called for was a removal of popular profit
measures such as earnings before interest, tax, depreciation and amortisation
(EBITDA).

‘It (EBITDA) is earnings before bad stuff. It’s absolutely ridiculous. We
have to get rid of it,’ Reuters quoted him as saying. ‘We want to get
people’s eyes away from a single number.’

He added that new IASB profit measures could be expected within the next
three years.

Many companies, however, are already buckling under the strain of
implementing IFRS and do not have much of an appetite for further changes.
Accounting firms have also expressed reservations about more reforms

At the conference Sondra Tarshis, Barclays’ senior manager of IFRS accounting
policy, said the market was desperate for stability, while Allister Wilson from
Ernst & Young said the IASB was taking its convergence project with the US
too far and becoming unresponsive to market needs.