Crucial meeting to decide IAS39 fate

Link: IAS special report

The final touches are currently being made on draft proposals to partially endorse IAS39, ahead of a meeting of the EC’s accounting regulatory committee on 8 September.

The proposals would see Europe take on the standard without paragraphs dealing with the fair value option, still currently out for consultation at the International Accounting Standards Board, and provisions on hedge accounting of core deposits, which Europe?s banks have claimed would introduce false volatility.

Endorsing the full version of IAS39 is no longer held to be a serious option within the EC after several key member states opposed its introduction, leaving the daunting prospect that failure to agree partial endorsement would see Europe entering 2005 without a standard on financial instruments.

‘If there is not support for the proposals, the fall-back position is not endorsing the standard until the issues with it are resolved,’ said an EC spokesman.

He added there had been no further indications of how member states would vote on IAS39 since the last meeting in July, when several nations sat on the fence.

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