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Andreas Barckow, Chair of the International Accounting Standards Board (IASB), addressed delegates at the 2022 EFRAG Conference entitled ‘Where is corporate reporting going?’ The conference is celebrating EFRAG’s 21st anniversary and its work in European financial reporting.

Andreas spoke about the IASB’s relationship with EFRAG over the years, and working together towards the common goal to create a global passport in financial reporting for multinational companies.


Ladies and gentlemen, good afternoon to you all. It is truly a pleasure to be invited to speak at this momentous occasion celebrating two decades of EFRAG and its work in financial reporting in Europe.

EFRAG and I go back many years, starting with my contributing research on the distinction between liabilities and equity to becoming a member of EFRAG’s Technical Expert Group a few years later, where I witnessed the organisational changes brought about by the Maystadt reform. I then switched roles and became an ex officio EFRAG Board member, because I had been appointed President of the German standard-setter. Finally, it was both a pleasure and an honour to have been asked to serve as EFRAG's Vice President to chair the technical discussions and assisting then-President Jean-Paul Gauzès in his work.

When I decided to step down from this position in early September 2020, it was with some regret as I truly enjoyed the role. However, I had become aware that I was considered for the role I am now in, so I took this decision in the best interest of both organisations. I am happy to see that our relationship continues to be a fruitful one, and I am sure this will continue during my tenure as IASB Chair.

The IASB and EFRAG certainly have a special relationship. It spans many years of collaboration, debate and discussion. We have always shared a common goal, regardless of our stances on various matters. That goal is to create a global passport in financial reporting for multinational companies—with EFRAG from an EU perspective, and the IASB as the international standard-setter.

21 years of working with EFRAG

Maintaining a relationship of any kind that has lasted more than two decades, and indeed spanned a continent, is no mean feat. We both share similar birthdays, with the IFRS Foundation being established and the IASB holding its inaugural meeting shortly before EFRAG came into existence. It seems therefore fair to say that our history is intertwined.

But moreover, it has been 21 years of shared success. In 2002, Europe adopted the IAS Regulation requiring companies listed on regulated securities markets, including banks and insurance companies, to prepare their consolidated financial statements in accordance with International Accounting Standards from 2005 onwards.

Europe’s decision to adopt IFRS Accounting Standards provided the necessary encouragement for most of the rest of the world to follow suit. More than 140 jurisdictions have adopted the IASB’s Standards around the world. So, arguably, our success is also Europe’s success. It’s a huge contribution to the world—just look at how the quality and consistency of financial reporting worldwide has improved.

EFRAG has been a constructive and positive influence on Europe in recognising the merit in having global financial reporting standards. The collaboration between our two organisations has led to real progress in ensuring that financial reporting is coherent to all investors and wider stakeholders, so they can make informed decisions. Over the many years, the IASB and EFRAG have collectively resolved reporting challenges. And even though at times EFRAG may bring different perspectives to the table than does the IASB, our discussions and debates have always been conducted with the aim of enhancing financial reporting by bringing transparency to those that rely on publicly available information for their decision-making.

As with any relationship, ours has had challenges at times. We have not always agreed with each other: sometimes that was because we followed different technical lines of argument; sometimes that was the case because of our different mandates, with EFRAG serving the European public good and the IASB having to consider a global environment. However, these challenges do not undermine the long-standing and trusted relationship.

We have no doubt that EFRAG’s input is invaluable—not just in what we, the IFRS Foundation, and the International Accounting Standards Board in particular, do, but across all of Europe. EFRAG ensures that the voices of those who do not necessarily have the means to contribute to our work can still be heard.

EFRAG’s ongoing contribution to our technical work is well informed and helps immensely in advancing our projects. EFRAG is a regular contributor, be it through informal exchanges, through comment letters or by being on our Accounting Standards Advisory Forum. EFRAG is also of huge help in reaching out to different jurisdictions and stakeholders in Europe and organising both targeted and general outreach activities. And, last but not least, its proactive work stimulates debate on topics for the IASB to consider working on.

It goes without saying that my time spent in different capacities at EFRAG and as the chair of a national standard-setter have given me insight into how I intend to orientate the role I now have as IASB Chair. Understanding the different mandates, needs and capacities that exist around the world is an essential prerequisite for developing meaningful contributions to financial reporting globally.

That said, we must not forget that we all share a common goal and are all working in the public interest. We therefore need to ensure that local preferences do not stand in the way of achieving and maintaining the higher goal of a global reporting language.

The future

So, looking forward, what does the future hold? Well, I would say that the key priority for both the IASB and EFRAG is to balance the varied needs of a wide range of stakeholders. We need to carefully choose areas to concentrate on, and where it will really matter. We need to be mindful that every change means a cost implication for everyone in the system. We need to consider stakeholders’ capacity to cope with changes, as well as considering the time and resources put into their implementation.

To help with this, the IASB earlier this year published its key priorities for the next five years, after analysing feedback from our Third Agenda Consultation.

What we heard is that we should keep our current balance of activities. However, we also heard that we should slightly increase the work on digital reporting and accessibility. Furthermore, we were told to bring projects on the work plan to completion before starting any new major project; this includes carrying out Post-implementation Reviews (PIRs) on IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases.

Notwithstanding the strong call that we should finish our current projects as a priority, we were also asked to add projects that respond to significant changes in the environment and to work in collaboration with our new sibling, the International Sustainability Standards Board.

So how have we shown that we are listening to the feedback?

We are busy working to complete the 20 projects on the current work plan. To just pick on two: the Primary Financial Statements project is well on track and will greatly enhance transparency and improve comparability of performance reporting globally. We hope to be able to conclude our technical discussions next year, so stay tuned.

Significant decisions have also been made in the Goodwill and Impairment project. Having considered all the feedback obtained, we decided to retain the impairment-only model of accounting for goodwill and to propose requiring a comprehensive set of disclosures in IFRS 3 Business Combinations on information about the subsequent performance of an acquisition. These two decisions will enable the IASB to move the project to standard-setting shortly.

The IASB is also being responsive to stakeholders where accelerated responses are needed. Examples in this area are work on clarifying how to apply the classification criteria to so-called ESG-linked instruments under IFRS 9, where we seek to publish an exposure draft early in the second quarter of next year.

Another area concerns providing companies temporary relief from having to calculate deferred taxes related to the so-called OECD Pillar Two tax requirements. This relief concerns the period between the enactment and the effective date of such tax legislation introduced by jurisdictions and should greatly help the adoption of this important OECD initiative. Given the urgency, we will publish an exposure draft with a comment period of just 60 days rather than 120 days in early January with the aim of finalising the amendment in the second quarter of 2023.

Also, in responding to stakeholders, we are advancing post-implementation reviews. The first phase of the IFRS 9 PIR is almost complete and the second phase on impairment initiated. The PIR on IFRS 15 is also progressing. Decisions will be made regarding PIRs on IFRS 16 and IFRS 9 hedge accounting in the second half of 2023. This timing will allow for further evidence to be submitted for the IASB’s consideration and to extend the comment periods so that stakeholders have capacity to engage fully with all that is being asked of them.

As I already mentioned, stakeholders also gave their suggestions for new projects for the IASB to consider working on. And how well they did: we received suggestions for some 70 new projects! In a judicious effort to listen to stakeholders’ feedback to prioritise completing projects currently on the work plan, we took a tough decision and only added two new projects to the IASB’s research pipeline. These projects focus on the statement of cash flows and on intangible assets, which I know are both priorities for EFRAG as well. These projects reflect major changes in our environment such as new business models, the growing importance of intellectual property and the rise of both the digital economy and non-cash transactions.

We also added a maintenance project on climate-related risks in financial reporting to explore whether our principle-based literature could benefit from refinements when it comes to  considering long-term non-financial risks in the financial statements more broadly. All in all, the IASB has certainly tried to defer to feedback that less is more!

Feedback also concluded that stakeholders want to see close collaboration between the IASB and the ISSB. Collaborating with the ISSB is an area many stakeholders flagged in various consultations. For us, connectivity is primarily important from a product angle, which means the information produced by the IASB and ISSB must connect. The process angle about how we get there is important but should not be the primary focus. We have put senior staff resources from both boards on to this to make sure the ’machine room‘ is ready once the ’bridge’ has capacity to start the topical discussions. This preparation includes reviewing each other’s board papers and exchanging information about each board’s key agenda items and decisions. I hope that those commenting on the ISSB’s agenda consultation that will be published early next year will mirror feedback from the recent IASB agenda consultation regarding working together on projects such as Management Commentary, Intangible Assets and climate-risk reporting.


To conclude my speech, the IASB and indeed the IFRS Foundation look forward to working with EFRAG to continue the work in maintaining and further enhancing a global financial reporting language and to fostering one global capital market, our mutual objective. It has been an incredibly fulfilling and pivotal relationship thus far—long may it continue.

Here’s to the next 20 years of this special relationship, and I wish you all at EFRAG a wonderful anniversary celebration.

Thank you for listening.