Complexity in focus for IASB chair
Last week Andreas Barckow, Chair of the International Accounting Standards Board (IASB), delivered a keynote address at the IFRS Foundation Conference which highlighting the growing complexity in financial reporting – and outlined the ways in which the IASB is navigating it.
Modern business is complex and intricate, with multiple, multifaceted risks affecting the financial landscape. Barckow acknowledged the challenges posed by this complexity to companies, investors, auditors, and standard setters, stressing the need for effective communication and decision-making. He also noted that while IASB standards strive to reflect economic realities, they can sometimes contribute to this complexity.
In response, the IASB seeks to take tangible steps to manage complexity. These include prioritising projects, enhancing collaboration among technical teams, and intensive efforts to improve adoption of the IFRS Accounting Taxonomy and engagement with digital reporting. Barckow highlighted recent initiatives like IFRS 18 and IFRS 19, which aim to balance complexity with practical benefits, enhancing comparability and simplifying accounting for subsidiaries.
Although today we have access to more data than ever, and standardisation and digitisation mean that modern business data is more trustworthy and comparable than before, the sea of information can contribute in its own way to complexity. Over the next decades, novel ways to handle the vast volumes of data will need to be found – such as harmonisation between different data sources – to help regulators, investors and businesses find their way through an increasingly complex financial landscape.
For the full speech, see here.
