Interesting article here on the horrible UKEB paper that I mentioned earlier this week. I am quoted extensively. Behind a paywall, but the main points are
- the paper conflicts entirely with the points raised in the UKEB’s priorities list, published last week, and fails to reflect concerns raised by Sharon Bowles among others.
- The paper says that absolute precision (in the ‘measuring’ the illiquidity spread to be used in discount rates) is not necessary, whereas the UKEB’s priority list says that discount rates often have a material impact on accounts.
- The paper concedes that estimating the illiquidity spread is a matter of judgment, but that is OK because “such judgements and estimates are integral to insurance business and insurers have extensive relevant experience”. The article quotes Hoogervorst (ex chair IASB) highlighting discount rates as one of the inconsistencies IFRS 17 was aiming to correct.
The paper was beyond even the usual joke expected of accounting standards bureaucrats.