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
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?
IFRS standards use too many different terms to say how likely it is that an event will occur. And different people using IFRS Standards interpret those terms in different ways. Those clear messages appeared in a research report issued in 2016 by the Korea Accounting Standards Board (KASB) and Australian Accounting Standards Board (AASB). I… Continue reading Saying how likely something is: way forward
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
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?
Many companies will need to spend a lot of money reshaping their businesses to help save the planet. Some environmental campaigners say that companies should book all that spending as liabilities today. They argue that booking that spending today would make investors focus on that information and that investors would then put pressure on companies… Continue reading Putting the wrong kinds of numbers in P&L won’t help save the planet
A common question about discount rates is how to estimate a discount rate for assets and liabilities with very long maturities. Such a discount rate contains a term premium that cannot be based on evidence and can never be back-tested. As a result, that term premium is not really an estimate, it is just a… Continue reading Discount rates for very long maturities
There is a strange but persistent rumour that IAS 1 Presentation of Financial Statements was written by Sir Henry Benson (later Lord Benson), the first chairman of the IASB’s predecessor, the International Accounting Standards Committee (IASC). If true, this would have been a remarkable feat. Benson’s term as IASC chairman finished in 1976 and he… Continue reading Did a dead man write IAS 1?
Many people have strong views about whether the International Accounting Standards Board (Board) should reintroduce amortisation of goodwill. But I can’t get excited about that as a topic for standard setting now, for two reasons: I think the arguments for amortisation (with impairment) and the arguments for impairment-only are quite finely balanced. I’m not sure… Continue reading I can’t get excited about goodwill