European insurers favour IAS 39 full fair value option
Jan 17, 2005
In a (PDF 279k), the Comité Européen des Assurances (the European Insurance Association) has expressed its support for allowing European companies following IFRSs to measure financial assets and liabilities at fair value with the fair value changes recognised in measuring profit or loss (the IAS 39 'fair value option').
Currently, IAS 39 as adopted by the European Commission prohibits European companies from applying the fair value option to liabilities. The CEA press release notes that "most European insurers make frequent use of this option for both financial assets and liabilities as a tool for providing more relevant information and simplifying the processes. They have been preparing for IAS 39 in the version including the unlimited fair value option."