TEN MISCONCEPTIONS IFRS

Danjou's presentation was recently translated by the IASB into English, and the "10 misconceptions" which he addresses in his remarks, with input from IFRS Foundation Chairman Michel Prada with respect to questions relating to the IFRS Foundation and governance of the two bodies, are summarized below (page numbers in parentheses refer to page numbers in the document):

1. IFRSs implement “fair value” widely, (page 9).
2. The purpose of IFRSs is to reflect the aggregate financial value of an entity, (page 11).
3. IFRSs deny the concept of accounting prudence, (page 12).
4. IFRSs give precedence to economic reality over legal form, (page 14).
5. With IFRS financial statements, business leaders are confused, (page 15).
6. IFRSs do not reflect the “business model,” (page 17).
7. Treatment of business combinations is an aberration, (page 19).
8. Financial instruments will soon be stated at “full fair value”, which will increase the volatility of earnings, (page 21).
9. "Fair value” is always defined as a “market value”, even when markets are not liquid, (page 23).
10. IFRSs create an accounting volatility not reflecting economic reality, (page 24).