In preparation for the upcoming Pittsburgh Leaders Summit, the IASB's emphasis has been to define in a balanced and transparent way the appropriate criteria for classifying instruments to be measured at cost and fair value.
In preparation for the upcoming Pittsburgh Leaders Summit, the G20 finance ministers recently called for: Convergence towards a single set of high-quality, global, independent accounting standards on financial instruments, loan-loss provisioning, off-balance sheet exposures and the impairment and valuation of financial assets.
The Trustees support the IASB’s deepening of its engagement with its stakeholders and its taking account of the Basel Committee guiding principles and the report of the Financial Crisis Advisory Group (FCAG). They are pleased that, while recognising the IASB’s commitment to investors as the primary users of financial information, the IASB, amongst other actions, has already established an enhanced technical dialogue with prudential supervisors, market regulators and other stakeholders. This dialogue will ensure their deeper input in the development of new standards.
The proposals to revise IAS 39 on which the IASB is now consulting globally provide a significant reduction in the complexity of financial instrument accounting—a goal highlighted at the April 2009 G20 Leaders Summit in London. The proposals are also consistent with the view of many stakeholders, including the Basel Committee, that cost-based accounting is appropriate for some categories of financial instruments.
The IASB’s emphasis has been to define in a balanced and transparent way the appropriate criteria for classifying instruments to be measured at cost and fair value—not to increase or decrease arbitrarily the use of fair value. Whether there is a decrease or an increase of fair value will depend on a particular institution’s business model and holdings.
Regarding governance issues, the changes proposed in the first part of the five-yearly Constitution Review are already in place. They include, importantly, the creation of a public accountability link to a Monitoring Board comprising public capital market authorities. On 9 September 2009 the Trustees published their proposals for the second part of the Constitution Review. These proposals seek to enhance further the governance and public accountability of the organisation. They also propose to improve the involvement of stakeholders in a broad range of perspectives in both developed and emerging markets.
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