16 July 2003

ECOFIN endorsed International Accounting Standards except IAS 32 and 39

During last ECOFIN meeting EU's Finance Ministers decided to endorse immediately all existing International Accounting Standards except the two controversial aimed at improving valuation of financial instruments (IAS 32 on Disclosure and Presentation and IAS 39 on Recognition and Measurement).

These two standards are still being reviewed by the International Accounting Standards Board. Meanwhile, pressure is mounting on the IASB. In a letter to Mr. Prodi, the French President Chirac said that IAS 32 and 39 would have “nefarious consequences on financial stability” if they were adopted in the EU.

Commissioner Bolkestein expressed his “extreme concern” over the failure to reach agreement over the two disputed IAS to Sir David Tweedie. “The perception seems to be that there is a lack of willingness on the part of the IASB to move away from theoretical concepts and to accept solutions that are based upon solid practical experience,” he wrote.

The next IAS Board meeting takes place in London from July 22 to 24 and IAS 32 and 39 figure briefly on the agenda for discussion.

ECOFIN results

© Graham Bishop