House of Control recently participated in the IFRS Foundation Conference and one of the subjects they talked about was “Supporting consistent application of IFRS Accounting Standards”, focusing on interpretation, practice, and the use of judgement. Here are our most important learnings from that segment.
How can organisations achieve consistency without compromising reality?
How can organisations achieve consistency in applying complex accounting standards like IFRS without forcing reality into a standardised template?
This was one of the central questions at this specific segment at the conference. The event gathered professionals from around the world to discuss how IFRS standards can be interpreted and applied with high quality and integrity – without undermining the critical professional judgement that financial reporting requires.
Why House of Control participates in IFRS seminars
As a provider of solutions that support finance teams with compliance, documentation, and structured accounting work, it is crucial for House of Control to stay up to date on IFRS interpretations and trends.
But it’s not just about keeping up – it’s about staying ahead.
For many of our customers, IFRS is an integrated part of reporting, requiring both robust system support and deep understanding. When rules, guidelines, or interpretations change, we must ensure that our solutions continue to meet these requirements and are implementable in practice.
Participation in IFRS events like this is therefore a natural part of our professional development and commitment to the accounting community.
Consistency does not mean uniformity
One of the insights from this segment was the nuanced understanding of consistency. It does not necessarily mean that everyone must do the same thing, but rather that everyone must understand the standards in the same way and make decisions based on a shared principle-based interpretation.
This crucial distinction was articulated by Bruce Mackenzie, member of the International Accounting Standards Board (IASB), and M P Vijay Kumar, CFO at Sify Technologies and IFRS interpretation committee member.
They shared concrete examples from the committee’s work clarifying how to handle questions when doubt or practice variations arise.
One of the clearest messages: There is no definitive answer key – but there are solid bases for decisions.
Our key insights from specific agenda decisions
Several agenda decisions were presented and discussed, particularly relating to IAS 1 and IAS 8 (on presentation and application of accounting policies) and IFRS 8 (on segment reporting). Key insights included:
Judgement must be applied, and wording matters
A central example involved an agenda decision on the presentation of certain income statement elements, where the use of the word “or” in the IFRS text created confusion.
Should a company present either A or B – or can both be presented?
The committee concluded that wording in IFRS should always be read in the context of the standard’s purpose. Companies must apply professional judgement, supported by notes and disclosures, to ensure user understanding of financial statements.
Materiality is not a fixed threshold
Another key point concerned materiality, one of the most central and elastic concepts in IFRS. It was emphasised that materiality involves both quantitative and qualitative assessments, and should not be confused with US GAAP’s concept of “unusual or infrequent items.”
This is particularly relevant for companies reporting segment information or unusual items. It requires continuous evaluation and documentation – processes that House of Control supports through our solutions.
Segment reporting should prioritise relevance over uniformity
An important discussion focused on how companies report segment information. The committee clarified that segment statements do not need to mirror the overall income statement. Instead, relevance for decision-makers should be prioritised over mechanical uniformity.
This is a valuable reminder that good reporting is not only about compliance, but also about communication and supporting decisions.
Should agenda decisions become more binding?
Finally, an interesting question was raised from the audience:
Should the committee’s agenda decisions be more binding – or even formally added to the standards?
IASB’s answer was clear: Agenda decisions are not standards themselves, but interpretations of how existing standards should be understood. Therefore, there is a limit to how detailed and operational the guidance can become – to preserve the principle-based nature of financial reporting.
This is a balance we recognise in our own solutions: providing structure and security without eliminating professional expertise and judgement.
The IFRS seminar provided us with new knowledge and reflections, which we carry directly into our ongoing development and dialogues with customers.
