RegulationAccounting StandardsMoore Stephens in IFRS dispute over ship orders

Moore Stephens in IFRS dispute over ship orders

Shipping operator Golden Ocean is in dispute with its auditor Moore Stephens over IFRS for derivatives

Owners trading newbuilding slots at congested shipyards, mainly in Asia, and
using International Financial Reporting Standards, may have to book
significantly higher earnings well ahead of delivery, according to the line of
Moore Stephens.

One of the world’s biggest dry bulk shipping operators, Oslo-based John
Fredriksen-managed
Golden
Ocean
, is in disagreement with Moore Stephens over the use of IAS39 for its
new building sales, according to shipping publication Lloyd’s List.

Moore Stephens wants to account for Golden Ocean’s new building sales as
derivatives, which will force owners to record a fair value, said to hold out
‘huge increases’ in its order values, reflecting the present volatile markets.

‘We are selling the vessels upon delivery – not the contract,’ Karlsen said.

‘We want to run a conservative business strategy. This will bring a lot of
market volatility into our accounts, which is not good for our investors. We
want to fight this for ethical reasons.’

Further reading:

Analysts defend pub FD caught in hedging nightmare

Read
story in the Lloyd’s List

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