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Michel Prada, Chairman of the Trustees, delivered a speech entitled 'Japan and global standards´. In the speech, Mr Prada takes stock of developments in Japan and around the world and also shares some thoughts on the future of IFRS.
Mr Prada´s presentation included two themes - stock of developments in Japan, but also around the world and the future priorities.
The G20 Leaders, Financial Stability Board, the International Monetary Fund, the World Bank and IOSCO are united in their support of the IASB´s work and mission of global accounting standards. Indeed, the Financial Stability Board only two months ago reaffirmed its commitment to “the continuing relevance of a single set of high quality global accounting standards. “
The IASB´s analysis shows that for most industry sectors in the world, IFRS is now the predominant basis on which companies’ financial statements are prepared.
As that trend continues, then so too will the costs of being outside the familiarity of the IFRS system. After all, international investors have a choice of where they invest their precious capital. In jurisdictions where the use of IFRS is optional such as Japan, the question for CFOs is whether you want to be inside or outside the familiarity of that international system.
The good news is that much of the world has now completed its transition to IFRS, and the remaining parts of the world, such as Japan, are well advanced in their preparations to do so.
Mr Prada mentioned the large economies that still have not adopted IFRS (China, India, the US, and Japan) and made out encouraging developments in all of them although he admitted that in the case of the US "progress has been slower than anticipated".
Trustees have worked hard to ensure that the institutional underpinnings of the IFRS Foundation and the IASB have kept pace with the growing responsibility of becoming a global standard-setter. In the short time since the IFRS Foundation began its work, were completed two Constitutional Reviews and two Strategy Reviews. Each of these reviews has introduced major enhancements to the transparency and accountability of the IFRS Foundation and the IASB. For example, the formation of the IFRS Monitoring Board, considerable enhancements to the IASB’s due process, including a public consultation on the IASB’s agenda, and the creation of the Accounting Standards Advisory Forum, or the ASAF.
The Trustees are now beginning preparations for the next public consultation on a review of the structure and effectiveness of the IFRS Foundation that will take place during 2015. This consultation will build on the achievements of enhancements provided by the two previous Strategy Reviews and the two Constitutional Reviews.