The EU's departing Internal Markets Commissioner, Charlie McCreevy, has said Europe needs more time to review the accounting rules by which banks and other companies' assets are valued.
So here's the 'tecchy bit': IFRS 9, which is Part 1 of the International Accounting Standards Board's (IASB) replacement of IAS 39 on financial instruments, has not been endorsed for use in the European Union.
This sends out such a negative message; that Europe's commitment to global standards is wobbly, which will not only harm its capital markets but the IASB as well, undermining its stance with the US on a converged financial instruments standard.
The purpose of some member states may well be to diminish the IASB's role and establish a European standard setter. The most likely way for this to happen is not a standalone new body, but by applying selected carve ins or carve outs to the IFRS standards. This will need time to engineer, so the approval has been 'deferred' as witnessed today.
Now this has happened, and EU companies cannot apply IFRS as approved by IASB, we might see some of these companies producing parallel sets of accounts - an IFRS set for the market, and a statutory set complying with EU standards as an appendix, to be ignored.
Loads of fee work for the accountants. But not what is needed now to help the global economy. And not what we asked for.
So here's the 'tecchy bit': IFRS 9, which is Part 1 of the International Accounting Standards Board's (IASB) replacement of IAS 39 on financial instruments, has not been endorsed for use in the European Union.
This sends out such a negative message; that Europe's commitment to global standards is wobbly, which will not only harm its capital markets but the IASB as well, undermining its stance with the US on a converged financial instruments standard.
The purpose of some member states may well be to diminish the IASB's role and establish a European standard setter. The most likely way for this to happen is not a standalone new body, but by applying selected carve ins or carve outs to the IFRS standards. This will need time to engineer, so the approval has been 'deferred' as witnessed today.
Now this has happened, and EU companies cannot apply IFRS as approved by IASB, we might see some of these companies producing parallel sets of accounts - an IFRS set for the market, and a statutory set complying with EU standards as an appendix, to be ignored.
Loads of fee work for the accountants. But not what is needed now to help the global economy. And not what we asked for.
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