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Accounting supremo Hans Hoogervorst on new rules and what to expect next
The International Accounting Standard Board aims to be more proactive in helping people implement new standards
Chairperson of the International Accounting Standards Board (IASB), Hans Hoogervorst, who oversees the development and implementation of International Financial Reporting Standards (IFRS) in 140 countries, visited SA this week. We quizzed him on the effect of new standards that have been introduced, what is still to come and the challenges facing auditors. From a banking perspective, it appears the adoption of IFRS 9 represents a change for banks in terms of raising provisions for bad debts? During the financial crisis, the existing standard was based on an incurred loss model. Losses could only be recognised when there was really strong evidence that they had occurred. The feeling was that it gave banks too much leeway to pretend that there were not too many problems on their balance sheets. Investors felt the banks could postpone inevitable losses for much longer than was acceptable, and they began to lose trust in what was represented on the balance sheet. So we felt we needed a ...
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