Andreas Barckow is the Chair of International Accounting Standards Board (IASB), an independent, private-sector body that develops and approves international financial reporting standards. Barckow,  an experienced and highly regarded leader in the field of international accounting, was recently in Kathmandu to attend an annual meeting of the Asian-Oceanian Standard-Setters Group (AOSSG). New Business Age talked to him about the status of the implementation of IFRS,  accounting in the digital era and financial reporting from environmental aspects, among other issues. Excerpts:

What were the major topics of the issues that were discussed in the AOSSG meeting? How do you summarize the outcomes of this meeting?
We had a very good three days of discussions, starting off with a working group session and two full days of feedback that AOSSG has provided to topics that are relevant to the International Accounting Standards Board (IASB).

The IASB has major projects where solicitors and countries from the Asia-Oceania region have given us input into our ongoing work. These include primary financial statements but are not limited to that. We have discussed intangible assets, we have discussed crypto assets and some other very important topics for AOSSG.

So these were the major problems or the issues identified during thematic discussions?
Yes. I would say half of the time we spent was on technical issues that are currently being discussed by the IASB. They provided input into our work. The other half were areas where individual countries presented their research work. That was feedback to us as an input factor.

How is the status of the implementation of IFRS at present? How many jurisdictions have adopted this?
We say that we currently have about 145 jurisdictions that have formally adopted IFRS. Because any company that wants to list on any market could voluntarily apply for IFRS. But 140 plus jurisdictions have formally adopted IFRS standards.

How is your evaluation of the progress in the implementation of Nepal Financial Reporting Standards (NFRS)?
Different economies are at different stages. The standards were primarily developed from the perspective of multinational big companies. This was, and probably continues to be, the prime purpose. We also wanted to help companies and help jurisdictions for other types of companies that are not listed or unlisted companies. We have two sets of standards - the IFRS for SMEs that are targeted towards non-listed companies and companies that are listed. We leave it to jurisdictions to choose which of the two regimes to apply, whether only one or whether two. I think that the Nepali standards that mirror the IFRS have been very successful in creating a path towards full adoption.

But there are some complaints about the financial reports of the companies in Nepal that they don't contain sufficient financial information. So how do you think this can be improved?
I think time mattes. So what we have learned through conversations that we have had in the breaks was some of the issues that jurisdictions face. Those that have applied IFRS, say 10, 20 or 30 years ago, have had exactly the same experiences. So I would really say take your time. Discussing the issues brings them to our attention and share the knowledge with other countries that have already carved that path.

With growing concern worldwide about climate change and associated risks, there is growing demand that the financial reports should have triple bottom-line and they should also have information also about environmental aspects.And it seems IASB does have a plan about this. What sort of requirements are likely to be added, in your expectation?
I can very much associate myself with that. However, the remit of the International Accounting Standards Board (IASB) is to set standards for financial statements only. Arguably, the information around sustainability, and ESG [Environmental, social, and corporate governance] more broadly, oftentimes doesn't form part of the financial statements, but is being housed outside of financial statements and sustainability reports or governance statements or other types of media. The IFRS Foundation last year set up a sister board to the IASB which is the International Sustainability Standards Board (ISSB) and that board set standards in the ESG space that, we hope, will continue the very successful path that we have had with financial reporting standards on the sustainability side. There is limited work that we will do at the IASB. The majority of that work, including climate change, will come from the ISSB.

There are also growing concerns about the rising risk from the cryptocurrency. So what do you think about this new front?
It is a very emerging topic and we are monitoring it. We are taking into account what other countries and standard setters are doing. We are aware that some countries like Japan and South Korea have looked into this issue for quite some time and we are very grateful for the research that they have shared. Personally, I think the majority of the risk management from a jurisdictional perspective should really be a regulatory issue rather than a financial reporting issue. What we can provide for is transparency. So if companies are holding cryptocurrencies, they should let the users of the financial statements know how much stake they have and why the hold them. Because there may be multiple purposes. But what to do with that information is really up for public policy and public securities regulators.

What do you think about accounting going digital in this digital era?
I think this is really the future. I grew up in a time when everything was paper-based and this is no longer the way how information is being consumed. Still, much of our literature is still devoted to producing annual accounts on an A4 page. We really have not kept time. So we have actually started a program where we increase our efforts to bring forward digital reporting. How far we can go is a question because this is a rapidly evolving area. We may use artificial intelligence, accounting taxonomies or databases, and we will surely make an effort for digtisation.