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Charlie McCreevy urges IASB to move up a gear on accounting standards to respond to systemic crisis

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Brussels, 08/05/2009 (Agence Europe) - “The International Accounting Standards Board (IASB) should accelerate work on crisis-related issues and come forward with technical solutions in time for the preparation of the 2009 annual accounts, in particular concerning impairment,” said EU Internal Market Commissioner Charlie McCreevy on Thursday 7 May 2009 at a conference on “Financial Reporting in a Changing World,” where he talked of “growing concern among finance ministers at the perceived slowness of the ISAB in responding to the systemic crisis.” At an informal meeting in Prague and then at the ECOFIN Council meeting on Tuesday 5 May, EU finance ministers asked the IASB, which is responsible for drawing up international financial reporting standards (IFRS), to get in contact with the relevant body in the United States on their recent amendments to US accounting standards (see Europe 9877). Ministers fear the changes will give companies using the US system a competitive advantage over the companies using the IFRS that apply in the European Union. McCreevy explained that “many ministers have complained about what they see as an 'over-academic' approach to standard-setting, which many see as 'out-of-touch' with today's reality.” 

Commissioner McCreevy welcomed as a “top priority for us” the IASB's plan to overhaul International Accounting Standard (IAS) 39 on loan-loss provisioning and fair value, a system “requiring banks to build up more substantial buffers in good times so that they can let them run down in bad times” which “makes obvious sense.” The commissioner repeated his call for a reform of governance of the system of drawing up IFRS: “Accounting is now far too important to be left solely to… accountants! Independence of standard-setters is important, but they must be fully accountable… We thus need to look at how the independence, quality and funding of the IASB can be improved and the reporting lines with public authorities strengthened.” The European Parliament has paved the way for adoption of a decision earmarking €12.75 billion worth of funding for 2010-2013 for the International Accounting Standards Committee Foundation, to which the IASB reports. The funding is conditional upon further improvements in IASB governance. (M.B./transl.fl)

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