International Financial Reporting Standards
Regional Policy Forum
The Singapore Accounting Standards Council ("ASC"), with the support of the Singapore Ministry of Finance ("MOF") and the Accounting & Corporate Regulatory Authority ("ACRA"), hosted the 2010 International Financial Reporting Standards ("IFRS") Regional Policy Forum in Singapore on 13 May 2010. The Forum, the fourth in its series since inception in 2005 in Sydney followed by other sessions in Tokyo and Beijing, was attended by more than 100 participants from Australia, Brunei, China, India, Indonesia, Japan, South Korea, Macau SAR, Malaysia, New Zealand, Singapore, Thailand, UK and USA. Amongst the participants were senior representatives of accounting standard-setters, professional accounting bodies, central banks, financial oversight bodies, tax authorities, government, securities exchanges, audit practitioners and academia. Mrs. Lim Hwee Hua, Minister, Prime Minister's Office and Second Minister for Finance and Transport, Government of Singapore, Dr. Robert Glauber, Mr. Jeffrey Lucy, Mr. Mohandas Pai and Mr. Noriaki Shimazaki, Trustees of the International Accounting Standards Committee Foundation ("IASCF"), Sir David Tweedie, Chairman of the International Accounting Standards Board ("IASB"), Mr. Tatsumi Yamada, IASB Board Member, and Mr. Wayne Upton, IASB Director of International Activities, also attended the Forum.
The global financial crisis, which caught the world by surprise back in 2008, carries important lessons for accounting standard-setters and policy makers as they continue in their efforts to enhance the IFRS so that the accounting standards remain relevant to the information needs of all stakeholders in a post-financial crisis world.
The financial crisis has also brought on renewed calls by the G20 on the IASB and the US Financial Accounting Standards Board ("FASB") to work together to further accelerate the development of a single set of high-quality global financial reporting standards, and to expedite global convergence and IFRS adoption.
Forum Theme and Agenda
In recognition of the rising importance of financial reporting in a post-financial crisis world, the Forum was themed "Beyond the Global Crisis – Making Financial Reporting More Relevant to Stakeholders' Needs".
Forum participants presented, discussed and exchanged perspectives on:
- the status of and current challenges faced by the IASB in the quest for global convergence and IFRS adoption;
- the nexus between the global financial crisis and convergence;
- the relevance of current financial reporting to central banks and bank supervisors in a post-financial crisis world and the future implications for financial reporting;
- the various ways in which financial statement presentation can be improved to make them more useful for preparers, users, policy makers and regulators;
- the increasing role of Asia-Oceania as a voice in the IFRS-setting process and active participation in the work of the IASCF and the IASB; and
- the Asian-Oceanian economies' IFRS adoption/convergence experience, spanning policy issues, challenges and implementation roadmaps.
The presentations and panel discussion sessions brought thoughtful insights and highlighted the rising importance of financial reporting in shaping and influencing the policy thinking, formulation, decisions and enforcement actions of policy makers engaged in the financial reporting value chain. They further underscored a felt need for the development and adoption of a single set of high-quality global accounting standards to enhance the understandability and comparability of financial statements within the region and the rest of the world.
- Participants re-affirmed their commitment to accelerate the convergence and adoption of the IFRS as a set of high-quality global accounting standards in the Asian-Oceanian region. Whilst participants recognise the significant efforts involved in overcoming existing impediments, IFRS adoption will, in the long term, lead to increased understandability, comparability, reduced regulatory arbitrage and political pressures, in the post-financial crisis era that the world is transitioning into.
- Participants agreed that for the IFRS to effectively reflect the economic substance and realities of business transactions in the region, it is imperative that stakeholders in the Asian-Oceanian jurisdictions play a more proactive role and become a larger voice in the IASB's quest to develop a robust set of high-quality international accounting standards.
- Participants agreed that policy makers such as bank regulators and tax authorities should more actively engage the IASB in the international standard-setting process in a collective effort to promote greater transparency in the global marketplace and in order to align policies more closely to new standards.
- Participants agreed that there should be closer alignment of the international auditing standard-setting process with the IFRS standard-setting process to enable consistency in interpretation and application of the accounting standards.
- Participants suggested initiatives to educate key stakeholders such as preparers, auditors, tax authorities, etc., on the rapid changes being made to the IFRS, to facilitate better understanding and adherence of the standards.
In conclusion, the IASB is reaching out to the Asian-Oceanian Standard Setters Group ("AOSSG"), which is coming together as an influential and knowledgeable voice in providing inputs to standard-setting and which forms a key pillar in a more efficient and transparent marketplace.
This IFRS Policy Forum is a complementary effort by the same AOSSG regional grouping to further the understanding of the more strategic considerations of moving towards the global convergence path, including wider engagement with policy makers such as central bank regulators, etc. The beneficial nature of our collaborative efforts will lead to more efficient markets for our businesses in the region.
The one and a half day workshop and IFRS Regional Policy Forum ended with a commitment to work together and share experiences on the common adoption of IFRS in the region.
The venue and schedule for the next IFRS Regional Policy Forum will be announced shortly.