Europe's IASB concerns voiced at global meeting

Michel Barnier, head of internal markets at the European Commission

Europe has reiterated its concerns about the International Accounting Standards Board's (IASB) governance, in a meeting of senior regulators from across the world today.

The rare gathering of global leaders took place amid concern about US adoption of international accounting standards, and continuing speculation on Europe's support of the IASB.

Michel Barnier, head of internal markets at the European Commission, said there continues to be governance issues with the board, in comments made at a meeting of the IASB's monitoring board in London this afternoon.

"Concerns remain in Europe remain about the IASB's governance," he said.

"There is still weak accountability…and the IASB still [displays] reluctance to acknowledge the effects of its standards on financial stability."

Mary Schapiro, chairman of the US Securities and Exchange Commission, said at the meeting there was a need for consistent application for international accounting standards.

"If we have these standards, how do we make sure they're consistently applied…that is an issue we hope [the monitoring board] have ideas about."

Also discussed at the meeting was progress towards convergence between international and US accounting standards. The US is expected to release its fair value rule within the next two weeks, however converging this rule with its international counterpart remains the "most difficult block", said one member of the monitoring board.

The meeting comes as Europe still decides whether to adopt the IASB's standard on fair value, released in the wake of the crisis. The standard uses a mixed measurement model to value financial instruments, mixing fair value and amortised costs.

The IASB brought forward the standards after pressure from Europe in November 2009. The rule has been adopted in some countries across the world, including Australia and New Zealand.

Sir David Tweedie, chairman of the IASB, told board members that he is striving to complete full convergence of international standards with the US but short of this, it may have to produce comparative guidance to help users understand the differences between the two.

Another issue covered at the meeting was the IASB's ongoing funding issues, which last year saw it dip into its reserves to operate.

Plans were revealed to funnel the IASB's European contributions through the European Union. Barnier said he would hold bi-lateral discussions about potentially increasing Europe's contribution towards the IASB, but gave no commitment that the funding would increase.

Further reading:

IASB should put this battle on hold

Gallic charm offensive – Michael Barnier, Internal Markets commissioner

Finance ministers mull fresh measures to aid regulators