An academic from Lancaster University Management School has submitted expert evidence to the International Accounting Standards Board to advise on how effective a particular reporting standard is in practice.

Focusing specifically on the International Financial Reporting Standard (IFRS) 9: Financial Instruments, Dr Argyro Panaretou, Senior Lecturer in LUMS’ Accounting and Finance Department, was among a number of international experts who offered research-based guidance to the International Accounting Standards Board (IASB) on how IFRS 9 is applied by organisations in practice, and its effect on firms’ financial statements, as well as the users reading them.

IFRS 9 is the financial reporting standard that specifies how an organisation should classify and measure its financial assets and liabilities. As an expert in accounting for financial instruments, Dr Panaretou joined colleagues to prepare a comment letter to the IASB on behalf of the Financial Reporting Standards Committee of the European Accounting Association, advising on whether the requirements in IFRS 9 enable companies to accurately reflect in their financial statements how they expect to manage their financial instruments.

Dr Panaretou said: “We presented evidence from our research which indicates that fair value measurement for financial instruments provides the most useful information to the market and we suggested ways to reduce the complexities and application issues associated with the standard. Our findings also demonstrated the need to provide more guidance on the measurement of financial instruments with sustainability-linked features. Failure of the standard to do this may impact the development of the market for sustainable financial products.”

The comment letter was submitted to IASB in response to its request for information for the Post-implementation Review of IFRS 9. IASB is the standard-setting board that develops the IFRS Accounting Standards that are currently required in more than 140 jurisdictions and permitted in many more.

Dr Argyro Panaretou’s research focuses on the effects of financial reporting on the decisions of capital market participants and managers. You can view more about her work here: Argyro Panaretou | Lancaster University