Hans got covid-related mail!

Thanks to my mask-wearing, socially isolated but still diligent mole at the IFRS Foundation, I’m pleased to present another selection of recent correspondence to and from the office of IASB Chair Hans Hoogervorst, this time on the burning topic of covid-19. Please read and marvel.

Dear Mr. Hoogervorst. I currently live in an environment where gatherings and social circles are severely restricted. As a gesture of sympathy for this hardship, wouldn’t it be appropriate to restrict the number of IFRS standards to be applied in any one set of financial statements – for example, if you correctly apply five of them, then you can socially distance yourself from the rest?

Dear Sir, I certainly admire your imagination, however misapplied it may be! As you are well aware, the social restrictions you refer to are motivated by concern that more concentrated gatherings may increase infection rates. In the case of IFRS however, each standard only grows stronger and purer through its proximity to its brothers and sisters. That said, anyone who works their way through IFRS 2 deserves some kind of break, so you may have given us something worth considering.

Chair – I feel strongly that the use of masks reduces social effectiveness by reducing our ability to read facial expressions and thereby glean important unexpressed information. I wonder if you share this view, based on recent interactions with other IASB members.

It’s an important question, but my experience is that all IASB members share the same perpetual look of glassily anguished horror, which can be perceived equally effectively both with or without a mask. I have often wondered whether my colleagues perceive this same look on my own face, but little do they know that I have hidden my real face behind a sophisticated prosthetic for the last four years!

Hans – I’m pretty sure this is the end of the world, and that covid-19 means death to all of us and to all value. Shouldn’t we just write everything down and be done with it?

I’m glad to say I don’t share your pessimism. I believe we should continue to prepare financial statements on the basis of an eventual return to normality, estimating future cash flows using reasonable but not overblown assumptions. Of course, if you’re like me and you’ve already moved everything into gold bullion, you won’t need to read any of them.

HH – More than ever, the pandemic has shown the importance to an entity of skilled professional employees capable of working from home. Isn’t this the time to finally grapple with the issue of recognizing such value as a balance sheet asset? After all, without our people, a knowledge-based business such as ours would amount to nothing.

My dear friend, I know your business, and believe me, it already amounts to next to nothing. That aside, I understand your point, but the conceptual issues are more than we can grapple with. How can we recognize people as assets if they never get dressed below the waist, or if we have no idea how they smell, or what they do as soon as the Zoom call ends? How can we reliably measure someone when their claims to be unavailable because of other online meetings can’t immediately be exposed as lies? The potential complexities and headaches make me shake right down to my slippers.

Mr. Chairman – Covid-19 has sharply reduced cross-border activity, pushing countries into greater isolation and perhaps mutual suspicion. Do you worry that this undermines the philosophy of IFRS, which is based on breaking down borders and building a sense of mutual comparability?

On the contrary, dear sir, I would hold up IFRS as one of the remaining things we can all enjoy together. I would even say that if the spirit and purpose of IFRS could be converted into pure chemical form, it would provide the basis for the much-hoped-for vaccine. If any scientist has the wherewithal to take on such a project, I will certainly volunteer to be among the first to inject myself with IFRS. I already tried injecting myself in the past with US GAAP, but that only led to those three lost weeks I spent living under a bridge.

Dear Mr. H – Because of mandatory 14 day self-quarantines, I haven’t been able to see my boyfriend for six months. Things have been hard with the distance and sometimes I get so down. Of course we talk all the time but it’s not the same. I’ve tried to think of other options but it seems like we just won’t be seeing each other anytime soon. I would really love to receive some words of advice and encouragement from you XXX

My dear lady, I have so much sympathy for your plight, and I know you are not alone in your suffering. I’m sure your boyfriend is a fine man, but a situation like this forces all of us to reconsider what’s important. Perhaps even as you write these words, you are little more than a figurative heartbeat away from other lonely people, separated from their own loved ones. I would not be much of a financial reporting leader if I prioritized idealism and sentiment over pragmatic self-care. My advice then is to politely dump the poor bastard, and go find some action closer to home!

The opinions expressed may have been susceptible to infection…

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