ACCA (the Association of Chartered Certified Accountants) deplores the possible delay in European take-up of the new International Accounting Standards IAS 32 and IAS 39.
It warns that any refusal to adopt the full set of IAS standards could threaten the goal of convergence between IAS and US GAAP, and the ‘holy grail’ of one set of global standards.
The EU said yesterday that it would shelve the planned imposition of the two standards – which would force companies to account for derivatives gains or losses – in 2005 unless agreement could be reached between the International Accounting Standards Board (IASB) and the European Commission, which is under pressure from French banks and insurers unhappy about the potential effects of the standards on their balance sheets.
Allen Blewitt, ACCA Chief Executive, said: “We are deeply alarmed to see that the EU may sideline the two standards if agreement cannot be reached. In view of the urgent need to have all European listed companies reporting on IAS by 2005 this is not a good message to send either to accounts preparers or to the investment community. We certainly do not believe that you can have one or two standards which vary from formal IAS.
Allen Blewitt added: “The goal of achieving a truly global set of financial reporting standards is vital for the credibility of the world's capital markets. All parties must accept that the process of global convergence will necessarily involve some pain and some gain – they must keep their eye on the bigger picture.
He concluded: “An independent IASB was set up three years ago specifically to avoid the problem of political interference and yet now it is being subjected to intolerable lobbying pressure to get it to water down its standards. How will the US take Europe’s professed aim of wanting better standards seriously if Europe will not back what the IASB is trying to do?”