The International Accounting Standard’s Board has released its contentious fair value standard, ending one of the most controversial projects in its short history.

The new accounting rule, hastily revised and reworked in the wake of the international financial crisis, aims at reducing the complexity of the fair value principle.

Fair value - the accounting principle which forces companies to value assets at their every day market value – came under sustained attack in the immediate wake of the financial crisis as banks and other financial institutions watched on as the value of their financial instruments plummeted in severely depressed markets.

The IASB, which already had plans to revise the standard, were forced to accelerate their efforts to bring in a replacement, which was released today.

The board’s swift actions enjoyed broad support from a number of international institutions and countries, however differences remain between its approach to the rule those proposed by its counterpart in the US.

The diverging standards will be a challenge that will need to be overcome if the world’s largest economy eventually decides to take on international accounting rules.

All eyes will now be fixed on Europe’s reaction to the accounting rule, with recent signs suggesting there might be some reluctance to adopt the principle.

European Commission officials expressed fears in a letter to the IASB that the fair value rule could add volatility to accounts.

If Europe rejects the IASB’s standards it would deal a major blow to proponents of international standards and likely encourage American detractors who already say the board is prone to political manipulation.

In a statement IASB chairman David Tweedie said he has delivered on his promise and commitment made to the G20, who asked the board to review the accounting rule.

“Benefiting from unprecedented levels of consultation with stakeholders around the world, the IASB has made significant changes in its initial proposals to improve the standard, provide enhanced transparency and respond to stakeholder concerns,” he said

Companies will now have the option to adopt the standard for their next set of accounts. The rule will however become mandatory by 2012.

Read the full IASB statement: IASB completes first phase of financial instruments accounting reform