Le magazine du trésorier - n°72 - 4ème trimestre 2010 - (Page 10)

Jean-François Hubin Partner Ernst & Young Réviseurs d'Entreprises - Belgique IAS 39 contributed to an increased dialogue between the Financial department and the Treasurer. During the financial crisis, many preparers have blamed the widespread use of fair value for an exaggerated volatility of the financial performances. However, the users of the financial statements do likely prefer financial statements reflecting the real economic volatility rather than a false sense of stability. IAS 39 is probably the accounting standard which has attracted the most political attention in Europe. This attention is legitimate, but we need to remember that the positions taken by politicians are not motivated by technical considerations, but by what they perceive as the “public good” or by their electorate. IFRS 9 seems to address mainly some of the concerns of banks. The lobbying of the banking sector has been much more effective than those of the treasurers. plans to invest. Finally, it comes as a big surprise that "IFRS" which represents a set of accounting rules, made up of the letters "R" for "Reporting and "F" for "Financial" makes no reference to any "A" for "Accounting", as if it wanted us to forget that in fact accounting rules are really what it is all about. FOCUS SIMPLIFICATION OF THE STANDARD FOR FINANCIAL INSTRUMENTS The goal of IFRS 9 was to simplify and improve the standard on financial instruments and provide convergence between IAS 39 and FAS 133.After the start of the financial crisis, one of the recommendations of the G20 in London was that these two standards should be fundamentally re-examined and made convergent to give greater transparency and comparability for users. Since IAS 39 was too rigid and unsuited to such a crisis, the IASB has had to modify it significantly. In any case, in the mind of the Board (i.e. IASC? IASB), IAS 39 had always been a temporary measure, intended to be replaced in time by a "Full Fair Value" (FFV) approach. Even companies within Europe. IFRS 9 will still be complex, we are quite sure of that. We will still have the "hedge accounting" exception for quite some time. In fact we now think that IFRS 9 may turn out to be a damp squib in spite of its long gestation period. But at the end of the day, is this not a manifestation of the wish of the majority to keep hold of what they have finally managed to bring under control and tame? When IFRS 9 is adopted, we will still be have to wait for convergence with the US standards, US GAAP, another major challenge set by the G20 in London. Well done to all of you who have survived IAS 39 for all these years and who have practised hedge accounting! We’ve had to change, to adapt our IT systems and programs, to invest in solutions for re-evaluating our financial instruments and for carrying out stress-testing. We’ve also had to modify all our internal procedures and sometimes even our hedging strategies and policies.The greatest paradox is that accounting has often taken priority over treasury management by, prior to dealing in any financial instrument, requiring consideration of its impact and accounting effect on the income statement, rather than the risk that it was intended to guard against. The accountants have no longer remained on the sidelines and their complex standards have reformulated the approach to risk management. Today, a treasury manager can no longer get by thinking in only financial terms, he must also think of the accounting effect and the implicit and potential volatility of the instrument in which he Sebastian di Paola Partner PwC IAS 39 has really become the standard that treasurers love to hate! In particular it has been widely criticised for being misaligned with financial risk management practices, for creating effects on the financial statements that are difficult for nonspecialists to understand, and for requiring significant time to be invested in activities which have unclear benefits. On the other hand, some treasurers will also admit that their organisations have benefited in a variety of areas, including: improvement in the relationship and understanding between treasury and accounting, a more robust link between policies and hedging activities, improved documentation of individual hedges, and even improved data on underlying exposures. The current process of replacing IAS 39 with something simpler has shown that the market is not looking for a complete overhaul of the standard, but rather for a smoothing away of it's many rough edges whilst keeping the underlying concepts largely intact. 10

Table des matières de la publication Le magazine du trésorier - n°72 - 4ème trimestre 2010

Couverture
Sommaire
EDITORIAL
- “Catch 22”, a synonym for Kafkaesque situations
FINANCIAL HIGHLIGHTS
INTERVIEW
- Mr. Johannes Heinloth, Global Head of Loan Syndications, BayernLB
FOCUS
- 10 years of IAS 39: what next?
- La réforme de la TVA, une vraie bonne idée ?
- Respirer, ça paie !
- An optimist sees the opportunity in every difficulty: is IFRS 9 an opportunity or a difficulty?
FORUM OF ADVERTISERS
- “FX Currency Hedging:Applying Cash flow at Risk (CFaR)”
- Working Capital Optimization, A focus on payables & trade credit management.
- La Fed et la Chine mettent l’Asie dans l’embarras
- Cash Management was yesterday, Cost Efficiency is key.
CORPORATE FINANCE
- Cinq questions à Philippe Lison, Administrateur-Directeur de Hamburg-Mannheimer Benelux
- 15 minutes with OtimO
TREASURERS' ASSOCIATIONS
- Deuxième Conférence CFO World : l’engouement des directeurs financiers luxembourgeois se confirme
- 14th IGTA Meeting & Semi-Annual EACT Meeting Geneva – October 2010
NEWS

Le magazine du trésorier - n°72 - 4ème trimestre 2010