European Commission adopts IAS39
The European Commission has adopted International Accounting Standard IAS39 on financial instruments.
However, it has carved out two sections on the full fair value option and hedge accounting, following criticism from European banks.
Brussels said that these exceptions would probably be temporary, as it expected the International Accounting Standards Board (IASB) to amend IAS39’s full fair value option by December and its hedge accounting rules by September 2005.
The Commission’s decision means that IAS39 will become legally binding for all listed companies from January 1, 2005, except for the carved out sections. In his last statement as EU outgoing internal market Commissioner, Frits Bolkestein said: ‘IAS39 has been very controversial’.