On occasion during August, for those of us who either through poor planning or choice were working throughout the month, it often felt much the same as the experience of sailors becalmed in the doldrums. Apart from being a month full of good resolutions about clearing up and catching up, one issue at least continued to bubble along and will have an impact on our members.
That issue is of course the adoption of IAS 39 (and the related IAS 32) by the EU. In the September edition of The Treasurer Liz Salecka’s editorial gives a flavour of what has been going on and restates the ACT’s position. At the time of writing this update I am not aware of any further change from the position at the time the September magazine was put to bed. We know that the EU’s Accounting Regulatory Committee is meeting on 8 September to consider input to the EU Commission on three alternatives to full adoption of the new standard.
The alternatives are partial adoption, full adoption but with a scope exclusion from the entire standard for banks and postponement of adoption. The key point here appears to be that unequivocal full adoption is not on the table.
The UK Government’s accountancy adviser, Andrew Watchman, has called a meeting in advance of the ARC meeting in order to canvas views from within the UK. We will be at that meeting. The ACT’s position remains that whilst we are in no doubt that IAS 39 is a flawed standard it is in our interest to see adoption without any carve-outs. We have also been at pains to state repeatedly that we accept that the IASB is committed to reconsideration of the overall standard within the short term and indeed we are aware of the steps being taken by the IASB to ensure that it delivers on this commitment. Any failure by the IASB to complete this process would be of great concern to us.
The prospects of any sensible outcome from the current EU discussions is dim at best. We will greatly regret a course of events that leads to a set of standards, however temporary, that is European rather than global in nature. We fear divergence with the US will be one inevitable consequence and the cause of global transparency in accounting – and therefore the much needed further improvement in the governance environment – will be seriously set back.
On the principle that there is an element of the doldrums about an update report from me on the month of August I will finish with just one further note – and with a fulsome apology for another accounting topic. With this there is however a real degree of certainty. The UK has a new chairman of the Accounting Standards Board, replacing Mary Keegan who has moved on to the senior finance and accounting role at HM Treasury. We have greatly enjoyed working with Mary – and not always agreeing with her. She has been a member of our Advisory Board since the beginning and hopes to remain so despite the change in her day job. We have of course honoured Mary earlier this year by appointing her an Honorary FCT of the ACT. Mary’s successor at the ASB is Ian Mackintosh and we have now had a first meeting with him and look forward to a relationship that continues the good work established by Mary. Ian will be our guest at the half day conference we are running on 30 November on the implementation of IAS39 and I hope a number of our members will have a chance to meet him then.
