PracticeAuditIASB attacked by Europeans over IAS39

IASB attacked by Europeans over IAS39

The European federation for the insurance industry has attacked the International Accounting Standards Board (IASB) for abandoning plans to allow fair value accounting for assessing financial assets and liabilities.

Link: IASB on collision course over IAS39

The Brussels-based Comit‚ Europ‚en des Assurances (CEA) claimed the IASB had been pressured by banking regulators, and that its industry would suffer as a result.

It said in a statement: ‘Most European insurers make frequent use of this option for both financial assets and liabilities as a tool for providing more relevant information and simplifying the processes. They have been preparing for IAS39 in the version including the unlimited fair value option. Such a fundamental U-turn would pose major changeover difficulties.’

CEA president G‚rard de La MartiniŠre said his officials would try to begin talks with EU banking regulators to better understand their concerns about fair value accounting ‘and assess the best way to deal with them’.

One possible solution, he said, would be to use ‘general accounting standards rather than supervisory tools’ to ease banking fears.

The row comes as rules insisting EU listed companies use IAS are bedding in, having come into force on January 1. As a result, De La MartiniŠre said it was of ‘critical importance to have a revised IAS39 in place… as soon as possible’.

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