Sir David Tweedie has said he is on track to reform controversial fair value
and impairment rules in the wake of the banking crisis, in an address to
European finance ministers on Tuesday.
The IASB chairman said that he had heard European concerns over ‘the pace and
substance’ of reform and promised to work harder to keep finance ministers
‘The IASB is committed to the timeline it has laid out. A new standard that
deals with your concerns will be in place by year-end,’ he said.
His address came in a week which has seen increased pressure from European
finance figures unhappy with the IASB’s performance.
An unnamed senior source close to the European Commission told The Guardian
last week there were questions as to whether ‘the IASB is the right body for
future rule setting’.
Speaking in Luxemburg, Sir David said the IASB needed to do a ‘better job in
taking the views of ECOFIN, central banks and prudential supervisors into
‘The IASB understands that the EU finance ministers have expressed an
increasing level of concern regarding the pace and substance of our response to
the issues raised by the European Commission,’ he said. ‘We take these concerns
ICAEW director of communications, Harry McAdoo, warned the drive toward
global financial standards should not be lost due to ‘short-term political
expediency in Europe’.
‘To criticise accounting standards for the purpose of valuing financial
instruments is to shoot the messenger at a point in time when that financial
information could not be more important,’ he said.
Criticism of the IASB has focused on the controversial IAS 39 principle which
requires financial institutions to value assets on their fair value and is
thought by some to have exacerbated the banking crisis.
In April the board said it would conduct an ‘urgent review of IAS 39’ and
announced a series of live webcasts aimed at seeking feedback on the proposed
Sir David’s comments coincided with a statement of support from the
International Accounting Standards Committee Monitoring Board, which was created
in January to provide public oversight on IASB’s operations.
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