Budget 09: profession backs single standard for banks

Accountancy bodies and standard setters have backed the government’s wish to have the banking industry governed by a single set of accounting rules as well overdue, after the chancellor appeared to back the IASB’s convergence efforts.

In his Budget speech, the chancellor said the Treasury was close to publishing a financial regulation paper which would outline reforms including a universal accounting standard, to help lift the lid on what risks banks were taking.

‘It’s good to see the government expressing strong support for global standards,’ said an insider at a leading standard-setter.

Banks headquartered overseas with UK divisions may report under GAAP, making it hard to compare them with London-listed institutions publishing IFRS-compliant accounts.

Chas Roy-Chowdury, head of taxation at ACCA said: ‘The chancellor said government support for a single global reporting language was well overdue.

Michael Izza chief executive of the ICAEW welcomed ‘the government’s commitment to a robust set of single accounting standards for the global economy’.

The G20 summit in London earlier this month committed itself to a single set of standards though there has been intense debate in the background between heads of state.

One of the most controversial aspects of international standards is the notorious standard IAS39 on financial instruments which is hated in some parts of the continent and has caused some, the French in particular, to lobby for wholesale change to the standard setting process.

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