Álit: tímarit löggiltra endurskoðenda - 01.01.1988, Blaðsíða 34

Álit: tímarit löggiltra endurskoðenda - 01.01.1988, Blaðsíða 34
landic context, IASC is saying that it is preferable that all enterprises in Iceland use the same index. This seems very reasonable, sensible and a matter of com- mon sense because all enterprises are trying to do the same thing, that is restate their financial statements for changes in the general price level. I understand that, in Iceland, all enterprises are not using the same index. This is a problem that I cannot solve but it is something that your Accounting Stan- dards Committee might want to discuss. It should ask why different enterprises are using different indices. Perhaps some enterprises are trying to do something different; perhaps some enterprises have different ob- jectives in mind. If this is the case you have a bigger problem than perhaps you think. But if they are all try- ing to do the same thing then it is in the best interests of the users of financial statements that they use the same index. Another problem raised in your submission is in re- spect of the income statement. E31 requires that bal- ance sheet and the income statement should be ex- pressed in terms of monetary units at the balance sheet date. You require the average for the year for the in- come statement. I do not see this as a particularly big problem. You have done the important thing already by getting your costs and your revenues in terms of the same money. Hence, you have matched them in money terms; all that you have not done is to roll them for- ward to the balance sheet date. If this is the only difference between IASC and Ice- landic requirements then I would not worry; you have done the important thing. It is, however, one of the things that becomes more important the higher the rate of inflation; the Mexicans, the Argentinians and the Is- raelis told us that it is important to them that all items in the financial statements are expressed in up to date money. The same argument applies to the restatement of the corresponding amounts for the previous accounting pe- riod and balance sheet date. E31 requires that they should be restated so that they express in terms of the money units at the end of the balance sheet of the cur- rent period. You make a point in your submission that you do not do this. You point out that it is probably not necessary because people mentally make those sort of adjustments. Although your point is a good one, IASC prefers that people donf have to make the mental ad- justments themselves when they are reading the finan- cial statements. You also raised some points about statements of changes in financial position. We have had submissions from a number of other organisations which have sug- gested that we are wrong. It is, however, one of those issues for which some countries hold very strong views. I think we finished up in E31 with a compromise which isnf the right solution and I am certain that in Novem- ber the Steering Committee will look at this issue more closely. Finally, you raised some issues about the calculation of monetary gains and monetary losses and you suggest that perhaps we need a more precise method in E31. E31 deals with the calculation in one sentence suggest- ing that this is the way that people normally do it. Some may read this as saying that it is the way you should do it; I would prefer words that indicate that this is the way it is normally done unless it is wrong; if it is wrong you do it some other way to make sure it is right. Involving the Business community in the Search for Improvements I have been told that you would like to improve your system further. In IASC, we also donf believe that we will necessarily have a perfect answer. So how can we and you improve things? First, the business people of this country, and the business people of every country must have a say in what is done. Hence, they must be part of the standard setting process. IASC started in the accountancy pro- fession but its base is now much wider involving, as I said earlier, the International Chamber of Commerce, financial executives, companies, financial analysts, the stock exchanges, the securities regulators and so on. It is often said that setting accounting standards is too important to be left to the accountants alone. The business people should be part of that process and help find the improvements. They should help first by telling the accountants how they run their business in times of hyperinflation - then together with the accountants they might decide how this should be best reflected in financial statements. This is the approach that IASC will adopt and I commend it to you. Conclusions Here in Iceland you have moved a long long way and made some considerable progress. The requirements, both of your Taxes Act and the opinion of the account- ing profession, results in substantial improvements to financial statements. You have recognised that basic unadjusted historical cost financial statements in an economy with hyperin- flation are totally meaningless and misleading. You have recognised that fact and done something about it. Your approach could be improved upon but that is rel- atively unimportant. You are doing the right thing and that is important. In spite of some very small differences, you will have accounting rules in this country which are in conformity with the proposed International Accounting Standard 34


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