Axa chairman attacks international accounting rules

Claude Bébéar, the outgoing Axa chairman and one of France’s most influential
capitalists, has said accounting rules requiring companies to value assets at
market prices has contributed financial volatility.

The Financial Times reports that Axa chief executive Henri de
Castries also criticised the rules and branded the mark-to-market method as a
‘conceptual mistake’.

The accounting treatments had created accounting losses that were not
economic losses, de Castries claimed, resulting in many current write-downs
being reversed in a few years.

‘The accounting systems in the economy are the thermometer, and I’m not sure
their measurement scale is the right one today,’ he said.

The two Axa board members were speaking as the company reported a 27%
increase in operating profits for 2007 to €5bn (£3.83bn). The strong performance
was tainted, however, by a €600m write-down on marked-to-market assets.

Further reading:

the Axa results here

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