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January 17, 2017

A not so “global” world when it comes to “global” standards

By Vincent Huck

One would think that in this so called globalised world, every day more digital thus dematerialised, the physical location of the headquarters of a global organisation would be irrelevant. However the UK FRC seems to be concerned of the IFRS foundation possible move overseas.

The IFRS Foundation’s offices lease in Canon Street (London) will expire in September of next year, and therefore it has issued an invitation to tender for estate agency services.

In the statement, the IFRS foundation said it may move to alternative location possibly overseas, but then stated that it would prefer to remain in the UK, in London or its surroundings.

However the UK FRC chief executive Stephen Haddrill seemed to have taken the possibility of a move overseas very seriously has he issued a statement saying: “The UK is the largest capital market to require the use of International Financial Reporting Standards (IFRS). It is the most powerful centre of accounting expertise outside the USA. Based in the UK, the IFRS Foundation has secured unique access to knowledge and experience, which has helped to ensure its international standards have kept in time with market developments.”

And he concluded: “A move overseas for the IFRS Foundation would be counter-productive. It is logical for the Foundation to remain in the UK.”

A comment which could come across as not too kind for counterparts in the European Union (EU), especially as the EU is the largest economic zone to fully apply IFRS without offering alternative options.

Contacted by The Accountant, French standard-setter (Autorité des Normes Comptables – ANC) president Patrick de Cambourg reacted: “All organisations related to public interest should be as close as possible to their stakeholders and review the location of their headquarters on a regular basis. Regarding the IFRS Foundation, there is certainly merit to be open and consider alternative locations, such as the very interesting ones (vibrant communities, significant capital markets) Continental Europe can offer. In addition, in a digital world, no location is a given. "

The European Financial Reporting Advisory Group (EFRAG) who advises the European Commission on IFRS declined to comment.

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