But it was short-lived. The Commission this week convened another meeting to
explore further changes that would allow widespread reclassification of
financial instruments so that they do not require a fair value calculation.
The fair value principle would be severely damaged and the prospects of the
Standards Boards, and independent standard setting, made uncertain.
By offering a limited compromise, the IASB has prompted criticism of giving
into politicians, creating greater confusion and undermining its own ambition to
be standard setter for the world. If that is true, it is not a good place for an
independent body to be. Confidence in its decision making could fall away
quickly. The politicians might sense vulnerability and keep pushing until, they
hope, reaching a position where the board is irrelevant.
But if the board stood firm and refused to give any further ground, it could
be sidelined by the Commission simply ordering its own carve-out of the
This need not mean becoming a lame duck board. Stand by the existing
principles and, experts speculate, it’s likely that few corporates would
actually use a carve-out because of the risk of being publicly scolded by
investors for producing opaque financial statements.
Would that save the convergence project? While admirable, it may be that the
IASB must leave that decision to the politicians, because they will surely
jeopardise the project with further carve-outs. Then at least the board will
have demonstrated the integrity we know it to have.
The new team will begin their new roles on May 9, 2017 for a year term
Committee expresses concern about costs to businesses and April 2018 implementation date
The ACCA has announced a regular Global Forum focussing on education
After a seven-year saga, a result has been reached between Margaret May and CIMA over misconduct