Restatements warning over IAS39

Link: Why is the City in a panic over IFRS?

Joseph St Denis, senior director in the credit policy group at Fitch Ratings, said that uneven application of derivative accounting rules on both sides of the Atlantic meant damaging restatements were increasingly likely.

The concerns come over the American rule SFAS133 and Europe’s IAS39, which aim to cut earnings volatility.

Denis told The Financial Times that inconsistency in the application of the American system, which has already led to restatements from companies such as El Paso and Shurgard Storage Centers, boded ill for the implementation of its European counterpart.

The fears were raised after a survey of 57 companies highlighted a lack of agreement over how the rules should be applied.

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