31 January 2006

ECON hearing on IASB progress

ECON held an exchange of views with Sir David Tweedie, Chairman of the IASB, on issues related to the work of the IASB. Mr Tweedie focused in his statement on the current status of the work of the International Accounting Standards Board and the adoption of International Financial Reporting Standards (IFRSs) in the Member-States of the European Union. In particular, the progress of convergence between the IASB and our US counterpart, the Financial Accounting Standards Board (FASB), the status of IAS 39, and the outcome of the IASC Foundation Constitution Review.

Particularly he pointed out that changes to IAS 39 are necessary as this standard is much too complicated. The IASB intends to issue principle based standards which are less detailed by nature. “The problem”, he said, is “to leave out lawyers” as this would lead to too much detailed standards.

However, no new standard is planned for this year, although there might be two minor changes to existing standards which are of differing importance to the Member States.

Starting the exchange of views Mr Radwan criticized that the Board still ignores the effects posed on SME through its standards. He also complained that the Parliaments views are still not incorporated. Mrs Beres added that the standardisation process lacks proper consultation and undermines an open legislative process. Another main concern posed by Mr Lehne is the under-representation of “Continental Europe” in the working groups.

Responding to these concerns Mr Tweedie lined out the general process of finding consensus. He made clear that the working party consists of members all around the world, that it just started working and that the process still has some 5 years to go. He also noted that the SME subject is of special importance to Europe. In contrast, “the US does not care as they don’t have IAS for SMEs”.

Speech Tweedie

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