BMW AG CFP Dr Nicolas Peter underlined BMW’’s opposition to the concept of special EU-IFRS rules. His comments came as he gave the keynote address at a stakeholder event in Munich on 26 June 2019, jointly hosted by the Trustees of the IFRS Foundation and the Deutsche Rechnungslegungs Standards Committee (DRSC, the German accounting standards body)
He said: “Standardisation and harmonisation are all about creating a level global playing field, with fair business and competitive conditions for all industries. The IASB, DRSC and companies all have similar interests here.
“At European level, we have seen growing efforts by the European Commission in recent years to regulate European companies even more closely. The Commission has considered “EU-IFRS” yet again.
“We firmly believe in the benefits of a globally standardised body of rules—which has always been the core idea of IFRS. For that reason, we oppose the concept of special EU-IFRS.”
Dr Peter had already set out BMW’s commitment to IFRS, saying: “I believe one thing is clear: uniform accounting standards are more valuable today than ever before. IFRS Standards are a major step towards this goal.
“The BMW Group fully supports these efforts, because comparability between multinational companies is one of the fundamental pillars of our globally integrated economic system—and has become an essential requirement for access to financial markets worldwide.
“The IASB has been a driving force in this process for more than 45 years and the DRSC has also become a strong voice in Europe in recent years.
“It was definitely the right decision for us in 2001 to follow IFRS. In the meantime, it is not just companies across Europe that have adopted IFRS Standards—it has become the global standard, used in more than 160 jurisdictions worldwide.
“Even those countries that don’t apply the standards directly, like China, closely follow the rules that the IASB has established over the decades.”
However, Dr Peter also noted the challenges and costs involved in adhering to the IFRS standards with the company having to invest in both personnel and IT. He added that true comparability was some way off in reporting and that more and more often earnings are being adjusted for one-time effects although he said this was not a practice that BMW used.
Dr Peter set out what he believes to be the limits of standardization saying that stakeholders are increasingly focusing on non-financial reporting and forecasting . In these areas he said: “When it comes to comparability and implementation within companies, we do not believe 1one size fits all1 is the right approach. Adequate flexibility is vital for coherent, stringent and appropriately-structured reporting.”