ARC supports Commission proposal to endorse “IAS 39 Fair Value Option”

08 July 2005

The Accounting Regulatory Committee (ARC) which advises the European Commission on the endorsement of individual International Financial Reporting Standards (IFRSs) agreed unanimously to recommend endorsement of an amended version of IAS 39 relating to the Fair Value Option (FVO) previously carved out. Unless the European Parliament raises objections, the Commission will therefore adopt the amended standard as soon as possible. Adoption will be retroactive to 1st January 2005, so that companies will be able to apply the amended standard for their 2005 financial statements.

Internal Market and Services Commissioner Charlie McCreevy said: “We also look forward to rapidly receiving the amended standard for the other IAS 39 carve-out on hedge accounting so that the EU endorsed accounting standards are fully in line with the IASB standards”.

Given the importance of rapid endorsement of the amended standard, the Commission has prepared a draft Commission Regulation which was unanimously approved by Member States at the Accounting Regulatory Committee on 8 July 2005. The Commission has consulted the European Parliament on the draft Regulation and, provided Parliament raises no objections, it is the Commission’s intention to adopt the amended standard by end September 2005. Adoption will be retroactive to 1st January 2005, so that companies can apply the amended standard for their 2005 final statements.

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