IASB in discussions to put SIVs on balance sheet

Corporates may have to develop parallel balance sheets to give a true reflection of vehicles which have previously been left out of formal statements, international accounting standard setters have revealed.

The International Accounting Standards Board is to publish a consultation paper on off-balance sheet practices this year, following criticisms over the role of such off-balance methods in the credit crunch.

Leading banks such as HSBC and Citigroup have already stated their intentions to bring structured investment vehicles back onto their books as a result of the market turmoil, the FT reported.

Among the solutions to the practice is the suggestion to structure a 'parallel' balance sheet that would explain off-balance sheet vehicles in detail and reconcile the figures with those on the main balance sheet.

Sir David Tweedie, head of the IASB said the organisation was trying to 'simplify the accounting so banks can say: "If it all blows up, this is what we face, but here are the reasons it won’t."

'That way, people have the information,' said Sir David.

Further reading:

Citi brings $49bn SIVs on balance sheet

UK banks face further writedowns