Position available soon – IASB Chairmanship

wish you a roaring new year

I understand the current IASB chairman, Sir David Tweedie will stand down in June 2011 upon expiry of his contract. Headhunters have been activated to look for a successor. I am thinking about applying for the position. What are requirements of the job?

Sir Tweedie has spent a decade in transforming an obscure committee into a board whose rules are effectively law in over 120 countries, including the European Union. If I were successful in getting the job, I must be able to deliver at least another 120 countries within the same time frame. I am sure it will be one of many thousands KPIs. What are other possible things in store for me?

I will need to be a skilled diplomat and yet comfortable debating the intricacies of financial reporting with technical experts.

Diplomacy is necessary as you attempt to cajole acceptance of IASB rules that may not fit the respective circumstances of each member country.

I must always remember to express my gratitude to European Union for giving IASB the kick start it needed.

I must be able to appease the Americans of their fear of surrendering regulatory control over financial reporting issues to Europe and the rest of the world. [Just like why they are keeping United Nations in New York?]

Besides Europe and US, I must be able to give the remaining stakeholders in form of Asia, with rising economic powers, a voice in the making of the rules.

I must be nimble to be able to “siam” the pots, pans and shoes that could be thrown at myself if the world faces another financial crisis in the future and blame IASB for it. Just like what they did to “Fair Value”.

I had the pleasure of meeting him once from about 20 feets away. He gave such an entertaining speech fully peppered with typical British jokes ie. subtle yet effective. I will always remember the newspaper-in-the-highland-of-Scotland joke. Tell you when I see you.

In short, Stig Enevoldsen, chairman of the European Financial Reporting Advisory Group (EFRAG) said, ‘If you look at requirements for the new chairman, the only thing that is not included is that he should be able to walk on water.’

So assuming if Edgar can do all the above and can walk on water, he will definitely get the job entitled “Accounting Ayatollah” or “Accounting Czar”….

Current Tax Trends

Here are the current tax trends and their respective consequences as observed and explained by Lor Eng Min and Ang Lea Lea of Ernst & Young Solutions LLP:-

a) Increased information sharing among tax authorities of different countries
Businesses with operations over several countries would have to be careful in ensuring consistent information being given to the various tax authorities.
[Edgar – The same attitude should be adopted in providing information to various departments within a tax authority.]

b) Tax authorities sharpen their focus on large companies.
As many governments have incurred budget deficits in 2009, enhancing tax revenue collection could be a priority. By focusing on large companies, a significant portion of revenue could be collected very quickly while sending a signal to the rest of market to comply.
[Edgar – Given the advancement in technology and information availability, tax authority now has the ability to drill down and cross reference on companies, big and small.]

c) Shorter filing deadlines
In Singapore, the interval between filing of tax returns and the financial year end of company has been reduced substantially. If your company’s year end is Dec 31, 2009, you are to submit your Form C in Nov 2010. [Edgar – Secondly, companies are encouraged to submit Estimated Chargeable Income. Failing which, the authority may present its own preliminary assessment and tax is payable within a month.]

d) Timely and voluntary disclosure requirements
Incentives in term of lighter penalty are explicitly stated to achieve the above.

e) Transfer pricing documentation and Advanced pricing arrangements
Given complex costing and pricing issues between entities in a group, the Group is encouraged to seek a formal understanding on any inter-company arrangement with tax authority.

Reference – Singapore Accountant, Jan 2010.

OECD wants country-by-country tax reporting

after 10.15pm

Impacts of such a move:-
It would shake up how multinationationals present their accounts.
It aims to cut back tax avoidance and transfer pricing in developing countries.

Organisation for Economic Cooperation and Development (OECD) will present guidelines that could force MNCs to reveal profits and tax paid/payable in every country they operate in.

The MNCs are worried that the transparency will provide civil groups, citizens and governments of such countries in which the MNCs have operated / are operating in, may have been short changed in tax revenue.

As they are just guidelines for the moment, OECD is pushing IASB to formalise it.