ECB report on assessment of accounting standards

19 December 2006

The ECB published a report on the “Assessment of accounting standards from a financial stability perspective” that provides for an assessment of the IFRS as recently adopted in the EU.The report identifies areas where concerns could arise from a financial stability perspective, including the reliability of “fair” values, the economic basis for hedge accounting, as well as the provisioning regime.

The report notes among others that, the introduction of the IFRSs in Europe did not sufficiently lead to a substantial increase in comparability and transparency, as implementation of the standards appears to be rather diverse.

For the banking sector, this is particularly noticeable in respect of issues such as fair value versus hedge accounting, or provisioning. For insurance firms, it is noticeable in the currently diverse accounting treatment of insurance liabilities.

Press release
Report

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