EU standard setters: Quality and thoughtfulness essential in IFRS

EUROPEAN STANDARD SETTERS gave broad nods to international financial reporting standards (IFRS), but called for a measured approach, with no headlong rush for perfection or convergence with US GAAP.

Talking at international financial reporting conference Meet the Experts, they called on international standard setters to listen to individual jurisdictions’ needs.

Global accounting standards have been a success, improving quality and comparability, according to Stig Enevoldsen, a leading figure in the European Financial Reporting Advisory Group

Concerns surrounding international financial reporting statements include ongoing small changes, interpretations and materiality. But Enevoldsen said a sensible, thoughtful interpretation and implementation of the standards should combat many of these issues.

His “mainly positive sentiment” was echoed by Liesel Knorr, president of the German Accounting Standards Board.

However, David Loweth, technical director of the ASB in the UK, offered a more measured evaluation of the standards, pointing to the “many, many years” it takes to complete and endorse standards in the European Union.

Jérôme Haas, chairman of French accounting standard setter the ANC, applauded the US for “considering before adopting IFRS”, saying this is something the EU “did not take long enough to do”.

He questioned whether the IASB “produces standards that sufficiently respond to needs, rather than anything else”, and asked whether Europe is sufficiently active in contributing to their development.

Knorr insisted convergence with US GAAP must be “the second priority of IFRS”, arguing: “Quality is absolutely the first priority.”

All the standard setters argued for “a period of calm” to get to grips with current global standards and revisions over recent years, saying this would help preparers and users gain maximum benefit from comparability.

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Fiona Westwood of Smith and Williamson.