EACB response to IASB’s improvement project

07 November 2002

-
The European Association of Cooperative Banks (EACB) supports the move towards the use of a common set of international accounting standards by quoted companies, but also states that the approach of the International Financial Reporting Standards should be thought over and incorporate some additional principles.

According to the EACB, the notion of Accounting Prudence, should be re-introduced into the IASB concepts. In relation to non trading activities, this would mean not recognising unrealised profits but making appropriate reserves for unrealised losses. This is essential for ensuring the stability of reporting results and the solidity of balance sheets.

Furthermore, standards should incorporate the principle that “fair value” is not necessarily the value at the date of a given financial closing but is calculated differently according to the underlying activity.

Position paper

© EACB - European Association of Co-operative Banks