KUALA LUMPUR: Sir David Tweedie has issued a
call to arms, urging jurisdictions around the world to adopt IFRS
without alteration or risk derailing the movement for a single set
of global accounting standards.
Tweedie, who presented in morning session on
IFRS convergence yesterday, also said Asia has a much greater role
to play in the future of standard-setting, and that the US is
likely to adopt IFRS.
This is the last World Congress of Accountants
Tweedie will take part in as the chairman of the International
Accounting Standards Board as he hands over the leadership baton to
Dutch regulator Hans Hoogervorst in June.
Tweedie told The Accountant the new
leadership team’s major challenge will be creating an agenda that
considers Asia and other emerging world economies.
“The first thing the new leadership will have
to do is determine the agenda and what issues really matter. I
would think look to Asia, frankly,” he said.
Then there’s the matter of simplifying
accounting standards that the current IASB leadership did not have
a chance to address.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“Our job was to sell a single set of standards
and that, in a way, deflected us. It was about what we had to do to
get people to buy in [to IFRS]. Now we have to look at the suite of
standards to think what’s got to be changed. That’s a huge
challenge,” he said.
Tweedie notes that two standards in desperate
need of replacement are income taxes and share-based standards. He
also lists government grants as “antiquated” and the method for
accounting associates in need of rebuilding.
“I think they’ve got to do a pruning exercise,
and on the other hand people will want things done on agriculture,
a big issue [in Asia], extractive industries, and so on. I think
there is a repair and maintenance job plus the new issues the board
has never tackled.”
While promoting the importance of Asia,
Tweedie also fired a warning to emerging powers that are looking at
carving out parts of IFRS for domestic use.
“If you want one set of global standard,
you’ve got to accept global standards,” he said. “I was listening
to one big Asian economy saying, ‘we’ve got special problems.’ And
you say, ‘what is it?’ When they describe it, you say, ‘that isn’t
a special problem for your country, you just don’t like the
answer’, he said.
Several jurisdictions in the past have issued
carve-outs to global standards, including Europe’s carve-out of the
controversial standard on financial instruments IAS 39. One economy
that is currently considering carve-outs to parts of IFRS when it
adopts is India.
If jurisdictions continue to alter the
application of IFRS, Tweedie said: “It will blow it up because
eventually the Americans will say, ‘there isn’t international
standards, why should I do it?,’ let’s keep to our own.”
At the session on IFRS convergence,
International Monetary Fund senior financial sector expert Kenneth
Sullivan also called for consistent application.
Pierre Delsaux, the EC Internal Market and
Services Directorate General on corporate governance, echoed
similar sentiments, while Federation of European Accountants
president Hans Van Damme questioned the value of convergence,
saying that efforts should be focussed on producing one set of
quality standards.
In response, Tweedie explained that
convergence was necessary in order to get the US on board and now
that the project is coming to a close the US will have to come to a
decision on whether or not to adopt.
“I just get the feeling that they want it to
happen, if they can do it,” Tweedie said.
The rest of the world waits with interest.
