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04 February 2015

IASB/Hans Hoogervorst: 'Switzerland and IFRS'


Hoogervorst discussed the causes of complexity and disclosure overload in financial reporting.

Hans Hoogervorst, Chairman of the IASB, provided a brief update on the IASB's work to establish IFRS as the global standard for financial information. 

Hoogervorst mentioned that Swiss GAAP is simpler and that it allows the reporting entity more freedom in the methods it uses to measure certain assets or liabilities. He outlined two examples. First, under Swiss GAAP, goodwill resulting from acquisitions can be directly written off against equity or else it can be amortised. This relieves reporting entities of the burden of yearly impairment exercises that is required under IFRS.

A second big difference between Swiss GAAP and IFRS is pension accounting. Under Swiss GAAP, a company has more freedom in its estimation of its pension liability.

Hoogervorst made clear in his speech that the IASB takes the issue of complexity in financial reporting very seriously.

One of the areas in which the IASB is determined to make complexity more manageable is Disclosure Initiative project. Financial disclosures have been ballooning for many years, and some of the information disclosed provides little in the way of useful information to investors. Tackling this problem requires co-ordinated action by standard-setters, regulators, companies and auditors.

In December last year, the IASB issued amendments to IAS 1 Presentation of Financial Statements that encourage companies to apply professional judgement in determining what information to disclose in their financial statements. For example, the amendments clarify that immaterial information should be actively avoided in the financial statements. The IASB will also give preparers more flexibility in presenting their accounting policies.

This is just a first step. The IASB´s next objective is to identify and develop a set of general principles for disclosure in IFRS. The IASB plans to publish a Discussion Paper on this subject in 2015.

Full speech



© IASB - International Accounting Standards Board


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