SwissHoldings, the Swiss Federation of Industrial and Services Groups in Switzerland, represents 59 Swiss groups, including most of the country’s major industrial and commercial enterprises. We very much welcome the opportunity to provide comments to this Discussion Paper (DP).
We recognise that there is legitimate interest from shareholders, investors and other users in these topics, and the DP is a useful starting point for these discussions. Our detailed answers to the questions in the DP are included below. However we would like to make the following specific remarks.
- We believe that additional disclosures on the objectives, targets and subsequent performance of business combinations are best addressed at a global regulatory level. We do not believe that such disclosures, in as far as they talk about governance and value-for-money considerations, belong in financial statements; and we question whether an accounting standards setter is the right body to be legislating on this. A useful analogy here is Executive Remuneration disclosures, where IAS 19 takes a relatively broad and high-level approach, and specific detailed requirements are left to the respective regulatory authorities.
- Having a global regulatory approach would ensure a level playing field, especially between IFRS preparers and their competitors who may be using US, Chinese or other accounting standards. To impose these at an IFRS level only would create a competitive disadvantage.
- We further believe that such disclosures, if needed, should be placed in the Management Discussion and Analysis and not in the Financial Statements.
- Such disclosures should only apply to public companies, and not to private companies and subsidiaries (in a similar manner to the application of IAS 33).
- Finally such disclosure requirements are an example of the kind of changes in IFRS that, in recent years, have led some small and medium-sized companies in Switzerland dropping IFRS in favour of the local Swiss-GAAP-FER standards. We believe this should be of concern to the IASB, as this may be illustrative of other jurisdictions where IFRS is not the only permitted financial accounting regime.
The minor improvements proposed in the goodwill impairment testing are welcome, but we would encourage the IASB not to invest too much time and energy trying to fix this in isolation. A comprehensive project to revisit the accounting and reporting of intangible assets in total is well overdue, to include goodwill and also internally generated intangibles; and we hope and support that the IASB can take this up at earliest opportunity.
See detailed response with appendix [pdf]