Interviewee A 18032011 PE A provided the following recollection We PE A and PE

Interviewee a 18032011 pe a provided the following

This preview shows page 211 - 213 out of 354 pages.

(Interviewee A, 18/03/2011) PE A provided the following recollection: “We [PE A and PE B] were on this train together, we were over at the OECD and it was an accountant and an economist on the train to London, thinking about this problem, this reporting problem and it was the connection between, you know, microeconomics and macroeconomics and reporting [superannuation guarantees] and so on and it just said, we have got to fix this, we have got to bring it together […]. David Tweedy 56 is a macro economist as well and his response was, […] “I don’t want IFRS to apply to government.” He said, “Somewhere down the track, you know, we may look into government but we can’t get there yet.” But interestingly, very much of IFRS is born out of macroeconomics, it is not born out of you know, traditional accounting for companies. […] Leases are a plausibility of the events described. No evidence was found to contradict the events presented by PE A. 56 David Tweedy was the chair of the UK Accounting Standards Board from 1990-2000 and was the Chairman of the International Accounting Standards Board from 2000-2011.
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198 very good example as well. You know, in a macro, in GFS or in a macroeconomic construct, increased wealth if you like or value that comes from the valuation adjustment as opposed to transactional activity, yeah, no difference there. So buying a building is economic value, it's an economic transaction, economic activity. Increase in its value is not economic activity. They are economic flows. And you know, so economic flows are part and parcel of GAAP/GFS and that’s what I was saying, that [we] had this realisation because as I began to learn more about GFS, I understood what they were trying to do and interestingly in my accounting career for many, many different, for a number of decades over many years, I personally had struggled with the accounting concepts that were part and parcel of the Australian GAAP. For instance, we would book an increase to value to equity, we would book a decrease to value to the [profit and loss statement] and I would say: “W hy would you do that? The answer: Because our accounting standards were being dominated by vested interests. Shareholders want to know about increases in value, bankers and lenders want to know about, you know, about capacity to repay and took a conservative position. [… ] So our accounting standards were riddled with what I called vested interest notions, rather than pure conceptual underpinnings. […] But you ask yourself, why wasn’t the Australian Accounting Standards Board, for many years you know, not just the current one, in the past, why did they subscribe to the view that operating leases should not be booked to the balance sheet. GFS constructs would have them there. Because it's an economic liability. It's an economic transaction with future value. David Tweedy at IFRS - where are they taking us? To exactly that point.
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  • Government, The Land, International Financial Reporting Standards, Financial Accounting Standards Board, Australian Accounting Standards Board, Snow

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