International standards ‘changed the value of accounts’

INTERNATIONAL Financial Reporting Standards have changed the value of information provided by accounts, according to the Association of British Insurers.

The body, which represents around 15% of stock market investors, said switching to IFRS has “changed users’ understanding of what they’re getting” when they look at accounts.

Representatives claimed “some would say the information is less useful”, while others may find it more suited to their needs.

Both users and preparers want a fair reflection of what is going on in a company, the ABI said. It favours the traditional ideal of a ‘true and fair view’, and warned that IFRS is “not quite in the same place”; instead, the global standards focus on providing a ‘faithful representation of reality,’ although the institute admitted the difference is slightly esoteric.

The organisation recently welcomed the IFRS Foundation’s decision to push back the deadline for convergence, saying that the standards setters should be less fixated on speed and more on quality.

Related reading

Fiona Westwood of Smith and Williamson.