ECON meeting 28 September

29 September 2009

The US and the EU are working together on certain aspects of accountancy standards; in April they jointly set up a financial accounting board composed of experts offering advice on the future of accounting standards.

The ECON committee has recently had an exchange of views with Sir David Tweedie, in which the Chairman of IASB highlighted the importance of agreeing global standards in order to repair mistakes made in the current financial crisis and ensure they are not repeated in the future.

The US and the EU are working together on certain aspects of accountancy standards; in April they jointly set up a financial accounting board composed of experts offering advice on the future of accounting standards. The key issues at the moment in accountancy are:
 
·         The application of fair value in illiquid markets.
·         Accounting for off-balance sheet operation, stressing the need for greater transparency.
·         Risk-related disclosure
Mr Tweedie remarked that in these three issues progress is being made.
He also referred to IAS 39 as a standard that is practically incomprehensible. The Commission and the Council asked IASB to work on it and give a proposal to improve it. There is a need to reduce complexity and, consequently, there is a requirement to revise the standards. At the June ECOFIN meeting finance ministers expressed their wish to accelerate the process and confirmed that the IASB is on right in track to achieve this commitment. IASB will review the impairments. It has received more than 200 comments and met with more than 70 institutions dealing with these issues.
Antolin Sanchez (S&D, ES) raised the issue of IASB funding. Mr Tweedie said that the IASB is urgently in need of funding because it is actually running a deficit. The Commission is providing it with money, but it not enough. Funding is important because the IASB is competing with institutions that are receiving much more money and they can operate far more effectively as a result.
Full speech

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