Partial EC backing for IAS39
The European Commission is pushing ahead with plans to partially endorse financial instruments standard IAS39, after failing to gain enough support from member states to approve the full text.
Link: IAS special report
Following opposition from a significant number of countries to IAS39, the accounting regulatory committee met at the end of last week to find a way forward. The commission proposed an intermediate solution, that would see listed companies adopting a large part of the standard from the beginning of next year.
But issues relating to interest rate margin hedging, which provoked extreme reactions from Europe’s banking sector, would be carved out of the standard and only reintroduced once an acceptable solution has been found.
It would also omit text on the fair value option, which is yet to be finalised and would not be ready in time to complete endorsement for 2005.
‘Partial endorsement is a less than optimal solution, but its probably the best option we have at the moment,’ said an EC spokesman.
The commission must put together a formal text for the proposal, which it expects to finalise in August. It will be put forward for a formal vote at an EC committee meeting which is scheduled for 8 September.
The International Accounting Standards Board refused to comment.