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In his remarks Mr Danjou stressed the importance of long-term investment in promoting economic growth and stability of capital markets. He also emphasised the role that financial reporting plays in helping long-term investors make sound capital allocation decisions.
Noting that critics of IFRS have claimed that the standards favour a short-term view because of the use of measurement tools such as fair value, Mr Danjou pointed out that the use of fair value is much less prevalent than many believe. He added that fair value accounting, where it is a relevant measure, enables transparent and timely reporting of ‘bad news’, which is essential for sound investment decisions.
Further, Mr Danjou explained that it is the aim of the IASB better to align accounting rules with the business models of the banking industry, to make the rules more understandable, and to make financial reporting by insurance companies more transparent. In his explanation, he emphasised that the IASB’s plans to replace the Standards on financial instruments and insurance contracts will not lead to an increase the use of fair value accounting.