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Companies warned on new standards

Business have been warned to concentrate its efforts on adapting to the new standards relating to financial instruments because they will form the biggest challenge for companies as global markets moves toward International Accounting Standards

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The warning was issued by Accounting Standards Board chairman Mary Keegan. With the arrival of IAS across the European Union in 2005, Keegan said that the 400-page exposure draft on amendments to IAS 32 and 39, relating to financial instruments, was the issue that had provoked the most vociferous response from the accounting community.

The standards on financial instruments proved highly controversial when they were published because of their drive to measure assets using market values instead of historic cost.

‘This has proved not to be the most popular of standards, especially IAS 39,’ said Keegan.

The warning comes amid mounting concern that companies will not be ready for international standards when they go live in 2005.

However Keegan advised: ‘If corporations devote most of the resources set aside for standard changes to just IAS 32 & 39, then they will be most of the way there. Most of the other standards will be relatively small changes on what we are already used to.’

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