IASB's Secretariat is housed at the IFRS Foundation headquarters in the City of London (pictured above), a short distance from Chartered Accountants' Hall.
LONDON — World Council of Credit Unions on Monday urged an International Accounting Standards Board (IASB) panel to make financial disclosures more succinct and easier to understand so as to increase their meaningfulness to credit union members and reduce compliance burdens on credit unions. The IASB Discussion Forum on Disclosures in Financial Reporting was held at Chartered Accountants' Hall in the City of London, the headquarters of the Institute of Chartered Accountants in England and Wales.
The discussion forum panel included IASB's Ian Mackintosh, vice chairman, and Patricia McConnell, board member, as well as representatives of other accounting standard setting and advisory bodies, including Hal Schroeder of the U.S. Financial Accounting Standards Board (FASB).
Michael Edwards, World Council vice president and chief counsel, attended the disclosure forum and commented that complex financial disclosures are often impenetrable to people who are not financial professionals, such as most credit union members and small retail investors. He asked the panelists to contemplate simplifying financial disclosure requirements so that they are easier to prepare and more easily understandable to ordinary people.
In response to World Council's comments, panelist Russell Picot, HSBC group chief accounting officer and recent co-chair of the Financial Stability Board's Enhanced Disclosure Task Force, expressed that disclosure simplification would be useful in general and that companies should have regulatory leeway to eliminate unnecessary disclosures, reduce the use of accounting jargon and be able to use disclosure language that key stakeholders can comprehend easily. McConnell commented that some aspects of financial disclosures, such as footnotes on accounting policies, are not very useful in practice because retail investors do not usually read them, and accounting practitioners are familiar already with the accounting policies in question.
"All credit unions would benefit from reduced accounting compliance burdens," said Brian Branch, World Council president and CEO. "Easily understandable financial disclosures will be most useful to credit union members in developing countries where shares and deposits are often not protected by savings guarantee schemes and many members do not have a university education."
The panel will report to the full IASB within the next two months about World Council's and others' comments on how to improve financial disclosure requirements.
The IASB sets International Financial Reporting Standards (IFRS), which apply to credit unions in a growing number of jurisdictions including Australia, Brazil, and Canada. The IASB and FASB are also in the process of converging IFRS with U.S. Generally Accepted Accounting Principles (U.S. GAAP), which will make U.S. credit unions subject to accounting rules that are the same as IFRS in most respects. In April 2012, IASB and FASB issued a report predicting that they would jointly issue final accounting standards regarding financial instruments, leases and insurance contracts by mid-2013.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 51,000 credit unions in 100 countries serve 196 million people. Learn more about World Council's impact around the world at www.woccu.org.