10 Years of IFRS in the EU
Speach at the ACCA-EGIAN conference, "10 Years of IFRS in the EU", 16/09/2015, Espace BancaMontePaschi, Avenue d’Auderghem 22-28, Brussels.
At the European Parliament we are obliged to understand what is happening, what impact the IFRSs have on businesses, and on life of our citizens. We already experienced a big failure of financial markets and we must not forget it.
Of course, it is very difficult to find who is guilty for the failure of the markets; but is very clear who paid for this failure. Citizens paid in order to save the banks.
There were many responses to both the revision of the Conceptual Framework and to IFRS 9 in the public consultation the IASB and the EFRAG did.
The European Commission report on 10 years of IFRS implementation tells us that almost everything is good. Personally, I expected much more from it, like how much was the contribution of the IFRS to the failure of the financial market.
Big banks reported big losses, just too quick. Nobody foreseen it and this problematic, we cannot understand it and the situation overall was unacceptable.
IASB responded by delivering new standards or improving the old ones. The process is almost complete.
At the European Parliament, we must be very careful about True and Fair view which raised the issue of the measurements, evaluations of the assets and liabilities. We must also be careful about prudence and stewardship. Companies cannot distribute dividends on what they expect and does not exist yet. We also have to do a better division in the Profit and Loss account and the Other Comprehensive Income account.
We receive letters from different interest groups at the Parliament that say reporting is not clear enough, but do not provide any solutions. Some of these letters do not disclose the real interest affected by a standards or other one. We do not like such letters.
At Riga we discussed about endorsement criteria which is a very important topic. Accordingly to the Commission report, everything is ok with criteria. But it seems that "public interest" has a different understanding for different people. The ECON Committee decided to initiate a report in order to set the position of the European Parliament regarding 10 years of the IFRS implementation and the activities of IFRS Foundation, EFRAG and PIOB -organisation co-financed from the EU budget.