UK investors write to Brussles over US standard
IFRS 8 could be manipulated to hide poor strategic decisions of managment, shareholders say
The European Commission has received a request from UK investors to stop
endorsing a US accounting rule that they claim will confuse companies.
The group, which includes the Investment Management Association, has written
to EC officials after its sentiments were rebuffed by the International
Accounting Standards Board, the FT reported.
The draft standard, IFRS 8, has alarmed investors, as it is set to give
executives the freedom to report results along product and geographical lines of
their own choosing.
Shareholder representatives have privately voiced their opinion that such
latitude could be exploited by unscrupulous executives to hide poor performance
or cover up results of bad strategic decisions.