Own credit risk

The topic of own credit risk generates perhaps more strongly held views than any other accounting topic. For example, in around 2011, the IASB was developing a discussion paper on insurance contracts. Some of us visited one of the largest insurers in the world. They knew almost nothing about the project. But they had heard… Continue reading Own credit risk

How IASB members use comment letters

John Hughes runs an excellent blog on Accounting and IFRS Standards. In a recent post Language barriers and the IASB, or: please read the letter that I wrote! | John Hughes IFRS Blog (disclosurehub.org), John Hughes commented on my post Language Barriers to commenting on IASB proposals – Accounting Miscellany I need to pick up… Continue reading How IASB members use comment letters

Does it matter that companies don’t consolidate pension funds?

Some people wonder why companies present pension liabilities net of the related plan assets. They suggest that instead companies should consolidate their pension plans. People making that suggestion think it would lead to companies presenting pension liabilities (gross) separately from the plan assets. This post explains why introducing a requirement to consolidate pension plans would… Continue reading Does it matter that companies don’t consolidate pension funds?

Language Barriers to commenting on IASB proposals

A recent paper looked at whether language barriers deter people from responding to IASB exposure drafts. It also discussed whether the IASB pays too little attention to comment letters from countries where the main language is very different from English. The paper “No Comment”: Language Barriers and the IASB’s Comment Letter Process, by Eduardo Flores,… Continue reading Language Barriers to commenting on IASB proposals

Finding out what users need

To set good accounting standards, standard-setters need to understand deeply how users of financial statements use and process financial information. One very useful report on this topic area was an academic literature review The use of information by capital providers produced in 2013, by a team of 6 academics: Stefano Cascino, Mark Clatworthy, Beatriz García… Continue reading Finding out what users need

Help for unpacking the objective of financial reporting

Paragraphs 1.2-1.4 of the IASB’s Conceptual Framework for Financial Reporting are written so densely that some people do not succeed in unpacking what they say. To make unpacking the meaning of those paragraphs easier, the IASB staff recommended in 2017 that the IASB should add a flowchart to the Conceptual Framework. This post summarises the… Continue reading Help for unpacking the objective of financial reporting

Tell investors about your crypto

There has recently been turmoil in the world of cryptocurrencies and cryptocurrency exchanges.  So, are companies disclosing enough about their holdings of cryptocurrencies and other crypto-assets? If they are not, should the IASB take any action? This post discusses the following: For brevity, in the rest of this post, I use the term cryptocurrencies to… Continue reading Tell investors about your crypto

First-time adoption of IFRS Standards: too many new exemptions?

The IASB issued IFRS 1 First-time Adoption of International Financial Reporting Standards in 2003. Under IFRS 1, entities switching to IFRS Standards must apply those standards in full, with some limited transitional modifications. The Basis for Conclusions on IFRS 1 describes the decision-making framework the IASB used in deciding what transitional modifications to include in… Continue reading First-time adoption of IFRS Standards: too many new exemptions?

Those mushrooming effective date paragraphs

The IASB has a problem with effective date paragraphs.  There are far too many of them and their number keeps growing. I believe it is time to find a better approach to writing these paragraphs. What does the IASB do now? When the IASB amends a standard, it also adds to that standard a paragraph… Continue reading Those mushrooming effective date paragraphs

The hardest question in standard-setting?

When accounting standard-setters have to make decisions about recognition and measurement, they often face two competing claims: some people argue that investors will under-react if companies are forced to recognise something; but other people argue that investors will over-react if companies are forced to recognise that thing. Standard-setters would love to get evidence that would… Continue reading The hardest question in standard-setting?