Professional Documents
Culture Documents
HHS - Why Did Nordstjernan Start The "Resistance Movement Against IFRS"?
HHS - Why Did Nordstjernan Start The "Resistance Movement Against IFRS"?
It was not because we oppose the idea of one standard for Europe or for the world
What is Nordstjernan?
Family controlled investment holding company Nordic focus
(without IFRS)
Examples of listed holdings: NCC, Ramirent,
Ekornes
Examples of non-listed holdings: Salcomp, Etac,
Rosti
7
(or in the whole world) is good for the capital market reduces cost of capital
B. If not IFRS is implemented we will have
Do we agree?
A. I am OK with this argument as long as the rules
are adequate. To have the same inadequate rules will not reduce cost of capital
B. To implement something because the
alternatives are worse is not a valid argument. History has shown this many times
Objective is to provide information for investors, not to help managers/boards to govern companies
1. An inadequate objective
The objective is to provide information for investors, not to help managers/boards to govern companies. Additionally, a lot of snmos
Land 100
Land 110
Equity 110
13
Land 100
Equity 110
14
IFRS increases the possibility of management to fix profits IFRS has nothing to do with cash flow
15
3. An inadequate organisation
Over 100 full time employees. What drives
driven? No!
Can companies influence IASB? No! (I do not
16
IFRS 3
- Earn-out
- Partial acquisitions/divestitures
17
IAS 39 Classifications
Normal financial asset Financial asset that is a held-to-maturity
investment
Long term investment is a short term investment that has gone sour Management will influence. Do bonuses effect behaviors?
18
20
Heureka!
21
IFRS 3 Earn-out
This standard is about business combinations,
100 with an extra 30 if profits the next coming years turn out to be OK
Since NCC believes that probability of this to
IFRS 3 Earn-out
The company XYZ does unfortunately not
exist and NCC makes 30 in extra profit. Heureka again! Make bad acquisitions and make money
23
Additionally, the management can create profits when they need them
24
IFRS needs
1. A new objective focusing on making
companies better
2. A new basic principle with cash flow focus
3. A new organisation 4. Many rules should be changed
25