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Mr Hoogervorst provided a brief update on the spread of IFRS Standards around the world. And then he talked about what is occupying the thinking of the Board right now.
All in all, the picture of IFRS adoption around the world may not be perfect, but the progress achieved in the past 15 years is nothing short of astounding. This progress is all the more remarkable given the fact that the IFRS Foundation is not an international treaty organisation. It is a private body and its Standards are not binding. The IFRS Foundation cannot impose anything and the adoption of IFRS Standards is nothing but the free choice of sovereign jurisdictions.
Acting in ‘enlightened self-interest’ means foregoing a smaller self-interest to achieve a bigger self-interest. Even when stakeholders may not agree with certain aspects of IFRS Standards, they know it is not in their ‘enlightened self-interest’ to modify them. They know this could set in motion a process of gradual balkanisation of the world of IFRS Standards, undoing the benefits of a single set of global standards.
The EC is currently conducting a Fitness Check on public reporting by companies. This Fitness Check covers a wide array of reporting issues and it also contains the question whether the EU should have the ability to modify IFRS Standards. Clearly, this is a sovereign decision for the EU itself to make. The fact that this is the third time in five years that the EU asks itself this question means that we cannot take European adherence to unmodified IFRS Standards for granted.
The IASB is currently working on the Primary Financial Statements project, implementation of IFRS 17 Insurance Contracts, wider corporate reporting and the consultation on the financial instruments with characteristics of equity.