Tweedie picks up fair value reform pace

Sir David Tweedie has said he is on track to reform controversial fair value and impairment rules in the wake of the banking crisis, in an address to European finance ministers on Tuesday.

The IASB chairman said that he had heard European concerns over ‘the pace and substance’ of reform and promised to work harder to keep finance ministers informed.

‘The IASB is committed to the timeline it has laid out. A new standard that deals with your concerns will be in place by year-end,’ he said.

His address came in a week which has seen increased pressure from European finance figures unhappy with the IASB’s performance.

An unnamed senior source close to the European Commission told The Guardian last week there were questions as to whether ‘the IASB is the right body for future rule setting’.

Speaking in Luxemburg, Sir David said the IASB needed to do a ‘better job in taking the views of ECOFIN, central banks and prudential supervisors into account’.

‘The IASB understands that the EU finance ministers have expressed an increasing level of concern regarding the pace and substance of our response to the issues raised by the European Commission,’ he said. ‘We take these concerns very seriously.’

ICAEW director of communications, Harry McAdoo, warned the drive toward global financial standards should not be lost due to ‘short-term political expediency in Europe’.

‘To criticise accounting standards for the purpose of valuing financial instruments is to shoot the messenger at a point in time when that financial information could not be more important,’ he said.

Criticism of the IASB has focused on the controversial IAS 39 principle which requires financial institutions to value assets on their fair value and is thought by some to have exacerbated the banking crisis.

In April the board said it would conduct an ‘urgent review of IAS 39’ and announced a series of live webcasts aimed at seeking feedback on the proposed changes.

Sir David’s comments coincided with a statement of support from the International Accounting Standards Committee Monitoring Board, which was created in January to provide public oversight on IASB’s operations.