Accountancy Age has covered the objection by the Investment Management Association, whose members manage £3 billion in the UK, to IFRS 8 - the new accounting standard that allows companies to segment report on any basis they like (to be candid). They also cover my comments on the same issue.
The IMA has said that it thinks IFRS 8 may not result in meaningful disclosure. As interestingly, they argue that the simple desire to converge with FASB was not enough to justify adoption of the 'management approach' IFRS 8 adopts.
Or as I put it in Accountancy Age:
'According to the standard, the [segment] data doesn't have to reconcile with the audited accounts, which is staggering. And they don't have to use the same process of accounting for segments as they do for the rest of the accounts. Therefore the accounts are totally and utterly open to manipulation,'
Ken Wild of Deloittes is noted as saying of the IMA objection to the EU about adoption of IFRS 8 simply to converge with the US:
'I wouldn't have gone down this route without more research and argument. But having gone the route, the European rejection is too much of a blunt tool for the purpose of stopping it. And it would be very unfortunate to use a blunt tool which will prevent the standard being used in Europe when it has been agreed in the rest of the world‚Ä¶ it could produce a chasm between Europe and the rest of the world again.'
I have to disagree with Ken. The simple fact is that no research would have changed the adoption of IFRS 8. This was done for political reasons. As was noted at the IASB meeting last September by one member, not one change to the exposure draft was possible as it had to accord exactly with SFAS 131. That's the issue here. I'm actually not saying IFRS 8 is wrong, but I am saying the process by which it was adopted does need to be revisited and the process should begin again, on a more objective basis with proper consultation being undertaken, including with those who want country-by-country reporting.