Courtesy of my mole at the IASB, I’m honoured to be publishing for the first time a WikiLeaks-worthy treasure trove of correspondence to and from the office of Chair Hans Hoogervorst. Read along now and dive as no mere civilian ever has before into the deep and complex waters of standard-setting.
Dear Mr. Hoogervorst Every accountant has his or her favourite IFRS standard. I personally have a soft spot for IAS 41, just because I really like trees. What is your favourite?
I know I ought to resist your question on the basis that a proud father does not differentiate between his children, even those which, as in my case, he inherited through adoption rather than by directly participating in their conception! But if pushed to respond, I will cite IFRS 9. Strictly between you and me, it’s such an unholy mess that I cringe whenever I think of it, which then oddly serves to bring out my most protective paternalistic emotions.
Dear HH I believe and agree with everything you say in speeches about the importance of IFRS to investors and to the global economy. The problem is, I also believe in Santa Claus. Which of these two beliefs would you consider to be the most irrational?
For a while, I understand that belief in Santa Claus was also running high at the IASB. However, this was snuffed out at the same time that all hope died of IFRS ever replacing US GAAP in our lifetime. As for the rest, I believe that at least half of what I say in my speeches is well-founded and reliable, although I confess I’m often not sure which half.
Hans my old friend Most of IFRS is incredibly boring to read. Can’t you do something to jazz it up a bit?
If you think it’s boring to read it, try being involved in writing it! But seriously, I’m quite sure you are right. There are, as you know, too many vested interests whose mystique and earning power partly depend on preserving this aura of insurmountable difficulty, and it has been darkly whispered to me that I should leave well enough alone, or else face the consequences. One of the “Big Four” even asked me in ominous terms whether I own a champion racehorse. I haven’t slept well since!
Dear Chef Hans What is your favourite IFRS-related recipe?
What a charming question! With fourteen board members on the IASB, our product may often seem to some like the archetypal broth that has been spoiled by the involvement of too many cooks! This is why, in my own culinary life, I like to keep things pure and simple, and to fill myself up with a hearty “Level 1” soup, consisting only of ingredients purchased in active markets. I also make a “Level 3” soup of unobservable inputs, but it usually causes me to miss the next day’s meetings.
MC Hans! How many IASB board members does it take to change a light bulb?
An excellent query! The answer is fourteen – thirteen to spend five years coming to a consensus on how to change the light bulb, and one to write a long and possibly more persuasive dissent
Dear Mr. Hoogervorst Do you have any tips for removing nasty stains from the cover of the IFRS bound volume?
I typically use a document cleaning pad filled with a special, absorbent powder that absorbs oils and other dirt. Alternatively, tear out a few randomly chosen pages of IFRS 2, spit on them, and rub away. The stain may not come out, but you’ll never miss those pages!
Dear Chairman H. My boyfriend never compliments me, he literally nver comments on how I look. I dont expect or want daily compliments, but when I make a lot of effort ie when were going out for the eve Id appriciate a ‘you look nice’ or ‘nice dress’ so I feel my effort is acknowledged. I know this sounds silly but its getting me down a lot. How do I mention this to him without sounding like a total brat?
How fully I sympathize with your predicament – it does not sound in the least silly to me! I likewise feel that our efforts in developing a high-quality set of global financial reporting standards are seldom fully appreciated. Of course, I realize that those involved in financial reporting are not the world’s most effusive individuals, and that standard-setting will always be more likely to be noticed only when things go wrong, and yet the situation often has me feeling melancholy. Sadly, in my case, I have no option but to live with the constituents we have and to make the best of it. You, however, have a whole world of choices. Therefore dump the self-absorbed fool now!
The opinions expressed are solely those of the author, whomever that may be. Happy holidays!