In 2012, Hans Hoogervorst, Chairman of the IASB, gave a speech at the FEE Conference on
Corporate Reporting of the Future entitled “The Concept of Prudence: Dead or Alive?”. The speech can be found on the IFRS website at: www.ifrs.org.
Instructions
(a) Hoogervorst indicated in his speech that there are many instances that demonstrate that IFRS implementation has not led to a loss of prudence. Discuss some specific examples Hoogervorst provides in which the revised conceptual framework of IFRS continues to instill the concept of prudence, although in practice not definition, in financial reporting.
(b) How does professional judgement impact the application of the areas discussed above?
(c) In your opinion, does IFRS result in the loss of prudence? Does this affect the value of financial reporting under the new standards?