Fears are growing that time pressures and a lack of resources could force Europe’s 7,000 listed companies to adopt a set of poor quality global accounting standards.
It has emerged that certain standards which are not even supported by the International Accounting Standards Board chairman will have to be adopted because of the European Commission’s 2005 deadline.
Representatives from eight of the world’s leading standard setting boards converged on London last week to meet the IAS Board to prioritise topics and discuss working relationships.
Particular concerns arose over IAS 39, which deals with financial Instruments.
The standard is deemed to be poor, and requires a shift in many countries to controversial ‘fair value’ accounting.
Mary Keegan, head of the UK’s Accounting Standards Board, said: ‘We need to know now if it’s going to be changed. We don’t want 7,000 companies implementing IAS 39 if it will be changed.’
Representatives from other European boards voiced similar, if not more radical, concerns.
French representative Antoine Bracchi warned: ‘It might be the breaking point. IAS 39, if nothing changes, will have to be applied in 2005. There is a lot of concern creeping in from banks and insurance companies.’
‘There is no enthusiasm for fair value accounting in Germany.’ said Germany’s Hans Havermann.
IASB board member Tom Jones ruled out any possibility of the rule being improved before 2005, ‘even if we devote all our resources and time. That’s academic. There’s no alternative now,’ said Jones.
For more on standards visit www.accountancyage.com/
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