Europe resolute on IAS39

Link: IAS special report

and IAS39 to be replaced

Members of the IASB met to debate the latest discussions with European banks yesterday, with the hope that the board could agree changes to the presentation of cash flow hedges in the balance sheet in the disputed IAS39.

Failure to do so would throw into doubt the successful implementation of international financial reporting standards throughout the EU.

A spokesman for the EC’s internal markets division said that, as IAS39 currently stood, it would not be endorsed for use in 2005. To appease the banks, the commission is looking to resolve the short-term presentational issues, with a commitment from the IASB to look at further changes in the medium term.

If the required changes are not agreed by mid-June, the spokesman said the EC was prepared to implement IFRS in 2005 without a standard on financial instruments. ‘We are not prepared to endorse a standard that doesn’t reflect the financial realities of European banks,’ he said.

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