Chink of light in the feud over standards
We now know there is a simmering antagonism between the chairmen of UK plc and the Financial Reporting Council over international accounting standards
Indeed, thanks to a recent article in the Financial Times by
Accounting Standards Board chairman Ian Mackintosh, we know that regulators, at
least, are feeling the pressure after a meeting in which the chairmen insisted
there were fundamental problems with IFRS and complained ‘stridently’.
Mackintosh says the chairmen should not worry, and sums up the problems as
‘teething troubles’ and their cause a ‘misplaced nostalgia’ for the old
accounting regime.
Those are strong words in themselves, especially the accusation that chairmen
are afflicted by nostalgia. He then goes on to dismiss their complaints almost
out of hand. ‘So much for the company chairmen,’ he writes. If Mackintosh were
looking for a way to incite the chairmen further, he may have found it.
But Mackintosh does indicate that the ASB may be giving ground on one
important point – how to deal with the volatility caused by fair-value
accounting. The ASB has a plan to tackle this by issuing a document on how
fair-value should be calculated (a real bugbear) and this will appear as a
‘discussion paper’ rather than an ‘exposure draft’, giving people more time to
respond.
The move, though subtle, is clearly a sign that the ASB is concerned enough
to at least hear the arguments, if not signal they are becoming more receptive
to them.
It’s too early to conclude which way things will go. However, if company
chairmen are spending so much time on complaining vociferously, it would be a
brave regulator who believes their arguments were entirely hollow.
