25 years of the IASB: have the reporting problems been solved?

This paper investigates the extent to which the IASB has removed imperfections in the set of standards which it inherited in 2001. Those imperfections included three large gaps: one of them (share-based payments) was filled rapidly, another (insurance contracts) was filled slowly, and the last (extractive costs) has been abandoned. The standards on other topics contained deficiencies, such as the amortisation of goodwill over an arbitrary period, the lack of capitalisation of many leased assets, and the incurred loss model for loan impairments. The IASB addressed those, and it made important improvements elsewhere, including removing arguably poor options such as LIFO and the pensions ‘corridor’ method. However, other options still cause a lack of comparability, such as options in the measurement of financial instruments and investment property. The IASB also inherited several deep-seated conceptual difficulties which it has not resolved, such as standards which are inconsistent with the definitions of liability, expense or subsidiary. The paper suggests explanations of the causes of the problems and tentative solutions for some of the outstanding problems.