If so, then we can help!

If you’re confused by convergence, confounded by country-by-country reporting standards, or self conscious about colossal tax avoidance in poor countries, you need: Counselling for accountants!

The Outlandish Revenue Service will be outside the IFRS conference at the Hilton Metropole at lunch on the 24 June, to offer a free counselling service.

Global convergence around a single set of financial reporting standards is just what we need to standardise and improve access to information for all users of company accounts.

The IFRS could be a powerful force for good and the IASB has a growing influence over the fortunes of businesses, markets, governments and citizens. Care is needed to ensure that new measures benefit the public as well as investors and businesses.

ActionAid and partners across the globe want to see less corruption, more public accountability of governments, and clearer tax systems in developing countries. We want to have confidence that companies are paying the taxes they are legally obliged to pay, but we also want them to be publicly accountable for their tax planning decisions.

Country by Country for extractive industries

The G20, EU and the OECD have made political commitments to tax transparency, and the IASB is considering country-by-country reporting. We want to see the IFRS6 standard for extractive industries – which are particularly vulnerable to corruption and tax evasion – revised to include a breakdown of key financial information on a country-by-country basis. To be a useful tool, depth, scope and accuracy are essential, which is why it should be included within audited accounts.

publish What You Pay, an alliance of which ActionAid is a member, is calling on the IASB to include a country-by-country reporting obligation within IFRS6 for extractive industries, which is currently being reviewed. The IASB recently published a discussion paper in which we believe there are a number of flaws. The discussion paper is currently open for consultation.

ActionAid supports the Publish What You Pay coalition’s analysis of the IASB discussion paper, which makes five key points:

1.    Companies should be required to report for each and every country in which they operate. The proposed thresholds for reporting based on what is quantitatively material to the company, and set at its own discretion, should be removed.

2.    Information on specific payments to individual governments is essential. The IASB should recommend country-specific reporting of payments to governments without the need for further cost-benefit analysis, in the same way that it has done for other reporting requirements.

3.    A minimum set of information is needed. To allow meaningful judgments and comparisons, all of the following information should be enclosed on a country-by-country basis:

         a.    Benefits streams (payments) to governments
         b.    Reserves
         c.    Production quantities
         d.    Production revenues
         e.    Production and development costs
         f.    The names and locations of each key subsidiary and property in each country should be reported

4.    There should be no reporting exemptions. To protect companies, the standard should require disclosure of payments to all governments.

5.    Users of company financial reports other than investors and other capital providers and their needs must be considered by the IASB. Other users of accounts – including employees, consumers, the public, civil society organizations and governments and their institutions – are each in their own right valid user groups of accounting data. Therefore, their specific information needs must be included in the criteria used to judge the benefits of proposed reporting requirements.