Approved last week, the amendments affect the fourth European Union directive for annual accounts, the seventh directive for consolidated accounts and the bank accounts directive. Under the changes, companies will be able to apply IAS 39 (Financial Instruments) without any legal conflicts.
The controversial standard uses market values or fair value accounting to measure financial instruments instead of historical cost. In a move that has generated a great deal of opposition from banks in particular, all gains and losses will now have to be put on the profit and loss account.
Mary Keegan, chairman of the UK Accounting Standards Board, said: It’s very positive to see the Commission starting the process of amending EU law to allow full implementation of international accounting standards. But, IAS 39 is not without its controversial aspects.’
French and German standard-setters voiced their concerns over the shift to valuing financial instruments at market values last month at the International Accounting Standards Board meeting. ‘Some people have called for IAS 39 to be reviewed by the IASB. It has needed lots of interpretations,’ added Keegan.
EU trashes IAS brand www.accountancyage.com/Practice/1121815.
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