When the European Commission approved a carved-up version of the standard at a meeting earlier this month, it provided an option for individual nations to compel companies to use the IASB’s full standard. This included sections on hedge accounting for core deposits and the fair value option that may of Europe’s banks had opposed.
But this option may prove to be little more than lip service, if the Accounting Standards Board is correct in its presumptions.
In a statement released today, the board said: ‘If this power to mandate full compliance lay with the board, it would do so immediately. However, the board understands that, as a consequence of the IAS regulation, the board may not currently have this power.’
The body is to explore this situation and will also release guidance for companies switching to IAS next year ‘as soon as possible’.
Companies that are not listed or are not required to switch to IFRS next year, however, will be required to adopt the full version of IAS39 as the board is preparing to release a UK rule implementing all of the standard’s requirements shortly.
ASB chairman Ian Mackintosh said there was ‘considerable uncertainty over the application of the adopted standard and its relationship to EU law, and those UK companies that will be applying international standards now have little time to address these difficult issues in order to implement the standard for 2005’.
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