IASB Chairman Asks G20 Task Force To Turn Up Their Hearing Aids

Posted on by Caleb Newquist

Accounting rule convergence is dead. I know it. You know it. Hans Hoogervorst knows it. Everyone has accepted the fact that the SEC managed to tell IFRS supporters to stick their principles-based rules where the sun don't shine in the most passive-aggressive way possible. Yes, the IASB is still coming up with pathetic ideas to convince holdouts that they're the coolest gang of double-entry wizards around, but, really, they know it's over.

On Monday, however, we learned that the G20's Financial Stability Board is still holding on to false hope like Allan West:
"The FSB reiterates the benefits of a timely completion of convergence and considers it important that the convergence programme not lose momentum in other areas," FSB chairman Mark Carney told G20 finance ministers meeting in Mexico on Monday. "The FSB will request by no later than end June 2013 a joint IASB-FASB report on all outstanding items with a specific timetable for completion," Carney, also Bank of Canada governor, said.
IASB Chairman Hans Hoogervorst managed to withstand an aneurysm and reiterated to The Accountant that complete convergence is like The Flying Dutchman: 
Hoogersvost told The Accountant the IASB will continue to work in close cooperation with the FASB on the remaining convergence projects such as financial instruments, revenue recognition and leases but that once this work is complete “convergence will come to an end”. “I support the FSB’s call to complete these remaining projects on a timely basis. Leslie [Seidman, FSB (sic) chairman] and I have already said in public that once this work is complete, convergence will come to an end. Instead, we will work with the US on a multilateral basis,” Hoogersvost said.

Hopefully everyone's on the same page now.

Hoogervorst: IFRS unstoppable, US to make its choice [The Accountant via Matt Kelly]

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What’s on Incoming IASB Chairman Hans Hoogervorst’s Plate?

Your next IASB chairman, Hans Hoogervorst, already has a few things on his to do list (right after scratching Sir David Tweedie’s name off the door), one of which involves restoring investor confidence by redoing last year’s bank stress tests in Europe since it seems they were not really credible, “One reason for scepticism was that sovereign bonds on the banking book were deemed to retain their full value, despite the fact that many were trading at steep discounts in the market,” he said. “The fact that some Irish banks that had passed the test later turned out to be insolvent only served to reinforce the doubts in the market.”

Doubts? That’s a kind way to put it.


Speaking at the two-day European Commission financial reporting and auditing conference, Hoogervorst also wanted to make sure everyone is clear on who rules the IASB. Despite appearances that rules are made by a handful of influential Europeans who like to play with accounting regs, he insisted the IASB is a multi-national group in which everyone gets a say. Or rather, he insisted that he’ll be trying to make sure the IASB is perceived as such, “It’s very important that we develop a governance structure that is more inclusive. At all costs we should avoid the perception that IFRS is dominated by a small group of nations,” he said. He did not seem to clarify if he was more worried about the actual structure of the IASB or just the appearance, nor did he mention how many U.S. delegates will have at the IASB’S table if we were to stop dragging our feet and just adopt already.

While auditors are taking a lot of heat for failing to catch just how bad off European banks were, H-squared doesn’t seem to feel they deserve so much criticism as they were simply following the rules. “How critical will auditors be when they see that regulators consider that severely discounted securities carry no risk?” he asked, obviously rhetorically.

Also in attendance at the conference, Federal Reserve senior associate director and chief accountant Arthur Lindo, who is hopeful that we here on this side of the pond will “move diligently towards some form of IFRS in the near future.” What Lindo did not say was whether or not the Fed would also adopt these rules or continue to use their freakish hybrid of GAAP and government accounting that they make up each and every year. Perhaps convergence will mean throwing in some IFRS into their 300+ page financial accounting manual.

Looks like Hans is going to have his hands full for the foreseeable future. Veel geluk met dat!

Accounting chief calls for more credible bank test [Reuters]