The holiday season means business life is on hold for many, but it hasn't stopped the Tax Justice Network, which has again asked the EC to reconsider adopting the controversial segmental reporting standard, IFRS8.

Tax activist Richard Murphy has several new arguments. He claims that the standard fails to reflect two EU legal requirements and that while the basis of the conceptual framework - a joint effort of the IASB and its US counterpart the Financial Accounting Standards Board - is being questioned, the EC should hold off adopting standards, such as IFRS8, produced by the body.

The IASB has gone on record, explaining that the reason for adopting IFRS8 - which is equivalent to an existing US standard, word for word - was essentially a show of political goodwill, in exchange for the US regulator's willingness to speedily remove the requirement for non-US companies to reconcile their accounts to US GAAP when filing there.

Murphy joins international investors and others - such as Christian Aid and Oxfam - in saying IFRS8 gives management too much authority in choosing which aspects to present in financial reports.

Murphy has argued in his submission that in the first instance, the fourth directive's article 43 (8) requires reported figures 'to be broken down by categories of activity and into geographical markets in so far as, taking account of the manner in which the sale of products and the provision of services falling within the company's ordinary activities are organised, these categories and markets differ substantially from one another'.

The standard would run against EU rules, he suggests. IFRS8 only requires geographic disclosure to be split between the country of incorporation and the rest of the world.

In the second instance, the seventh directive requires issues pertaining to social and environmental reporting to be considered when accounts are issued, which IFRS8 does not and which several not-for-profit organisations are campaigning for.

Murphy's third point is that the UK's Accounting Standards Board and the European Financial Reporting Advisory Group are questioning the IASB/FASB's endorsement of the idea that the purpose of financial reports is 'resource allocation decision-usefulness'.

If the EC is convinced of Murphy's points, they could refer the standard back to the IASB to deliberate on further.

The IASB could cave in somewhat and review IFRS8, which could amount to an admission that it allowed the adoption of a flawed standard.

However, it's more likely to stick to its guns and defend the standard and its processes vigorously.

For more see taxresearch.org.uk