The chief financial officer of one of the world’s largest banks has taken aim
at Europe, which he believes backed the international standard setter into a
corner on a revision of its fair value standard.
a letter to the Financial Times, Douglas Flint, CFO at HSBC, said
he wants to see the International Accounting Standards Board’s (IASB) fair value
rule, known as IFRS 9, adopted by Europe as soon as possible.
In a reference to European detractors of the IASB, Flint claims that pressure
was applied to the IASB to service political agendas.
“Many of the objectors to IFRS 9 sought to take the IASB to a position they
knew it could never support, because their agenda was to create conflict with
the IASB as part of a larger political agenda,” he said.
“Others sought to reach a position which offered them greater flexibility in
how they accounted for financial instruments under their own definition of their
business model – but this is untenable in an environment where trust between
financial institutions and the public has been seriously damaged.”
The IASB came under sustained pressure from European finance ministers in the
wake of the financial crisis, in an effort to make the body accelerate the
review of its fair value standard.
The standard forces listed companies to value their assets at market prices.
The rule forced banks to write down their financial instruments as liquidity
dried up in international markets.
Flint acknowledges that the present rule is not perfect, but believes is
better than the existing provisions.
“Accounting for financial instruments will never be perfect. IFRS 9 makes it
better and therefore should be available to European institutions as a European
Union-endorsed standard, so enabling early adoption in line with the rest of the
IFRS world,” he said.
Read the full letter:
perfection, just aim for improved reporting standards
Improvements to cashflow statements are being targeted in a consultation launched by the Financial Reporting Council (FRC)
"The whole idea of HMRC officials supplying confidential information about individuals to the media on a non-attributable basis is, or should be, a matter of serious concern," say Supreme Court judges
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