The International Accounting Standards
Board (IASB) should change its strategy from an emphasis on
convergence and concentrate exclusively on major improvements and
simplifications in IFRS over the medium term, according to Europe’s
largest accounting body and the head of the UK accounting
regulator.

The Federation of European Accountants
(Fédération des Experts comptables Européens – FEE) said
although the IASB’s convergence strategy has delivered good results
since the standard-setter was created in 2000, many countries have
now either adopted IFRS in full or have substantially reduced the
differences between IFRS and their national standards.

“FEE believes, however, that we are now in a
period of diminished returns from further convergence due to the
rapid increase in complexity, without hardly any additional benefit
to investors that arises when seeking to eliminate increasingly
smaller differences between IFRS and other standards,” FEE
said.

FEE Financial Reporting Policy Group chairman
Mark Vaessen said developing new standards and making improvements
to existing standards should be guided by a work plan that sets
clear priorities and that justifies the need for changes.

“Although there should be continuous
improvement of standards, improvements made must be measured in
cost-benefit terms. In other words, improvements should be made
only in areas that really matter,” he added.

UK Financial Reporting Council chief executive
Paul Boyle echoed FEE’s sentiments at the regulator’s annual open
meeting this month.

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“We have concerns about the future direction
of IFRS,” Boyle said.

“We believe that the IASB’s objective should
be to improve IFRS and should not include reference to convergence
with particular national standards. It is not clear to us that
convergence between IFRS and US GAAP is the best strategy for
improving IFRS.”