Outlook: Just too much

IN HIS time Sir David Tweedie was something of a hero. The spate of corporate collapses of the late 1980s and early 1990s had so tarnished the credibility of the accountancy profession that there was a clear need for a crusader to seek out, challenge and blow away the creative techniques that had been used to tart up the accounts of so many.

Plain David Tweedie, as he was then, positively revelled in the role when he became the first chairman of the Accounting Standards Board in 1990, keeping a blown-up copy of the headline "Most Hated Accountant in Britain" in his office and always ready to swing opinion his way with a suitable sound bite. He was often as creative with his language as his targets were with their accounts. "Psychoanalytical accounting" and "big bath provisions" were two of his catchphrases.

In the 10-year term that concludes next year, he has achieved a great deal. Most of the rules by which UK companies set out their accounts are much clearer than they were and, accordingly, users generally have a much better idea of what is happening to their investments.

But you can always have too much of a good thing and lately his pronouncements have become more and more arcane. Yesterday's proposals for trying to bring some sort of consistency into companies' treatment of deferred tax are just the latest attempt to deal with problems that were hardly on the radar when Sir David started out.

Defenders of the ASB maintain that issues of how to treat tax and pensions may look obscure, but are every bit as serious as the acquisition accounting abuses that were tackled earlier this decade. This hardly seems believable, since it is the cash position of a company that bankers, other creditors and investors are most interested in. If the tax is never likely to be paid, it might reasonably be argued that accounts that provide for it are less representative of the reality than those that do not. The issue thus becomes of little more than academic interest.

Much of the justification for these changes is the pressure to bring British accounting practice further into line with other parts of the world. However, the tendency for Britain's standard setters to include a few tweaks of their own is evidence that - inevitable as it is in an increasingly global economy - harmonisation of accounting rules is still some way from being a reality. If it is to come any closer, there will have to be a new breed of less high-profile, more accommodating leaders of the national standard-setting bodies, in Britain and the US in particular.