IASB 'always had plans to overhaul IAS39'
The IASB has said it has always had long-term plans to overhaul the controversial accounting rule on financial instruments, IAS39.
Link: Bank of England wades into IAS39 debate
Sir Andrew Large, deputy governor of the Bank of England, this morning (Monday) told a central banking conference in London that the situation surrounding IAS39 is ‘unsatisfactory’.
But Tom Seidenstein of the IASB said: ‘The IASB thinks the existing standard provides a workable solution in the context. In the long-term we are doing exactly what Sir Andrew is proposing. But in the short-term a total revision of the rule wasn’t feasible.’
IAS39 was issued in 1998, and companies around the world have been applying the standard in their corporate accounts since then. But due to some ‘inconsistencies’ in the rule, standard-setters decided to revise parts of the rule ahead of European listed companies adopting mandatory application of international financial reporting standards on 1 January 2004.
The IASB has just established a working group that will be tasked with redrafting IAS39. ‘The question is what the timeframe is and what they can do. There’s no clear direction,’ said Seidenstein.
This morning Large said: ‘In my view, the only way forward is first to take a few steps back, before work starts on re-engineering the standard.’