IAS39 carve out removed after EC endorsement
The long-running standoff over IAS39 between the European Commission and the International Accounting Standards Board has been resolved
The EC’s Accounting Regulatory Committee on Friday unanimously voted to
recommend the endorsement of an amended version of the standard relating to the
controversial fair value option.
The option was one of two areas that was ‘carved out’ of the original
standard following opposition from financial institutions across Europe. The
other, relating to provisions on hedge accounting, remains unresolved.
The commission intends to rush through the endorsement process and, as long
as the European parliament raises no objections, the standard should be endorsed
by the end of September. It will be effective in retrospect from 1 January 2005,
enabling companies to use the revised standard in their 2005 accounts.
‘The fair value option carve-out was always intended to be exceptional
and temporary,’ said internal market commissioner Charlie McCreevy.
‘We look forward to rapidly receiving the amended standard for the other
IAS39 carve-out so that the EU endorsed accounting standards are fully in line
with the IASB standards.’