Editorial

Rather like the brought-forward balances in general ledger accounts, there are a number of articles in this newsletter on topics that began running some time ago, certainly in 2018, if not earlier, but which are continuing into 2019 and possibly beyond. Some of these topics are familiar friends. We have read about them, thought about them and worked on them; we feel we know them well. Very often, the subjects recur because they are the subject of a debate and we may well already know the arguments put forward by each side; so while we enjoy a comfortable sense of familiarity with everything discussed, at the same time, we begin to wish that there could be an end to it. This is much how I felt when reading an article about accounting for long-term equity investments, published by the CFA in the US, which defended US GAAP against criticisms made by long-term investor Warren Buffett. In Europe, EFRAG has recently provided an update on its latest thinking on the same subject to the European Commission. The CFA Institute has expressed a preference for the US GAAP accounting requirements for long-term equity investments over those in the financial instruments standard, IFRS 9. However, since the FASB and the IASB had consulted widely on their respective standards, it was concerned that challenging the requirements after the due processes had been completed could harm the independence of the standard-setters. An alternative point of view is that it is at least possible that by exploring all options either a better way of accounting might be found or there could be a shared acceptance that there is no better way. With either outcome, this matter could then be put to rest. These latest developments are covered in the “News and analysis” section on p 5.