RegulationAccounting StandardsGetting the right man

Getting the right man

The task of finding a replacement for Sir David Tweedie at the IASB could be a tricky one… and football finances are in the spotlight with Portsmouth FC's groundbreaking CVA deal

We’re just a year away from the departure of Sir David Tweedie from his post
as chairman of the International Accounting Standards Board. And, 12 months out,
there is already a shortlist of potential successors.

Starting the replacement process this early is wise as the job is complex.
Tweedie was – is – in charge of setting international standards but he has been
much more than a technician for a long time. His role has included diplomacy,
political calculation and no small mount of cunning.

In short, replacing Tweedie is a hard job. In some senses though, Accountancy
Age would have to say that this succession is already failing. We don’t say that
harshly but only to point out that what the trustees of the IASB really should
have done is to split the two roles that Tweedie has occupied in practice, so
that there is both a technician and a politician coming in to look after the
interests of the IASB.

Looking after the politics has been a major drain on Tweedie’s time and
finding someone who can replace him in quite the same way will be extremely
difficult and probably too much to ask of a single candidate.

An own goal

The rescue of Portsmouth Football Club has proved a gripping financial tale.
The sheer scale of the debts, the tragic-comedy end to the season and the role
of HMRC have all added to the story.

But it is the taxman who is attempting to turn the travails of Portsmouth
into permanent changes for the finances of the biggest football clubs.

This week we report that HMRC is to start fresh legal action in a bid to
overturn the rules that mean so-called football creditors – players, managers
and other clubs – have priority once a club goes into insolvency instead of the
taxman.

HMRC argues that the rules have no basis in law. We have been here before but
previous attempts to turn the rules on their head have failed.

Yet there is a much larger issue here now. It is possible that the taxman has
run out of patience with the rules and with football clubs and could, in future,
decide, as a
creditor, that it will oppose clubs using less demanding administration
procedures, such as a CVA, and instead insist on a liquidation from the off.
That could mean sending a top club out of existence.

In Portsmouth’s case, a combination of CVA and liquidation will be used. The
taxman may, in future, come to see its best interests served by simply pushing
for liquidation – a case of being awkward to prove a point. And the point is
that the taxman wants to be treated fairly. Of course, this is speculation, but
there’s still plenty of time to play in this game.

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