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Private investors call on the IASB to reconsider its proposed Conceptual Framework
The UK Shareholders’ Association (UKSA) wants ‘prudence’ to be fully restored as an accounting principle. The latest proposals by the International Accounting Standards Board (IASB) do not achieve this, so UKSA is calling upon the IASB to think again.
There are those who hold the opinion that ‘prudence’ has never gone away, but others – including UKSA – strongly disagree and believe that its absence has contributed significantly to investors’ losses in recent years, most notably in the banking crisis of 2008. The IASB is responsible for the International Financial Reporting Standards (IFRS) to which all UK listed companies must adhere. The IASB first published its ‘conceptual framework’ for IFRS in 1989. It has since been amended, but as a result of continuing dissatisfaction a further review began in 2013. UKSA first commented on the IASB’s proposals in January 2014, focusing particularly on fundamental aspects of the framework rather than with detailed aspects of the proposals. In May 2015 the IASB published an ‘exposure draft’ of its further thinking about the proposed framework, which UKSA has welcomed but still finds seriously inadequate.
UKSA has produced a considered response (here) to the IASB’s exposure draft. It calls for further and better thinking by the IASB before investors can have the confidence in IFRS to which they are entitled.