Investors call on EC to drop more changes to fair value reporting
Corporate Reporting Users Forum calls on European Commission to drop proposals for further IAS39 carve-outs
A senior group of investors and analysts has written an open letter to the
European Commission insisting that there be no further carve-outs to the
controversial accounting IAS39 during a meeting to be held in Brussels today.
The letter, published in the FT today, says: ‘Now especially, investors need
comparability and transparency, not further uncertainty and inconsistency.’
Signed, among others, by Nick Anderson, head of research at Insight
Investment and Peter Elwin, head of accounting and valuation research at
Cazenove, the names on the letter are all from the Corporate Reporting Users
Forum (CRUF), a pan European grouping of investment analysts.
The Commission has already endorsed changed made to international standards
that bring them into line with US GAAP. But the agenda at today’s meeting tabled
much broader changes that would allow all classes of financials instrument to be
reclassified and therefore duck the application of fair value accounting.
The FT letter says that CRUF believes ‘that further changes, which go beyond
aligning IFRS with US GAAP, risk severely undermining the confidence users have
in the accounts produced by European companies.’
Yesterday, the Investment Management Association released a statement saying
the proposed changes could threaten transparency and comparability.
Last week JP Morgan released a paper signalling its disappointment with IASB
changes but also stating its objection to further reform of the standards.