European joint statement on the current market turmoil
11 Jul 2008
EFRAG and the accounting standard setters in France, Germany, and the United Kingdom have discussed the current turmoil in the world's capital markets and have issued a Joint Statement.
The ASB, CNC, EFRAG and GASB take very seriously the questions that are being asked about financial reporting as a result of the current market turmoil. While we do not believe that financial reporting has caused the crisis as some have claimed, we do believe it is essential that a comprehensive review is carried out of existing external financial reporting requirements to determine whether any of those requirements has intensified some or all of the problems that have arisen. It is also essential that any weaknesses identified in the financial reporting requirements are addressed and improvements made as a matter of priority. A number of bodies have carried out work on this subject and have suggested that the main areas worth exploring further are:
In response to the credit crisis, the IASB has undertaken to carry out and complete in a timely fashion work on all these areas. It has also undertaken to consider whether other improvements in IFRSs are necessary in the light of recent experience. In our view, the IASB should be the body that first responds to the accounting issues arising as a result of the current market turmoil. However, if the IASB is to be able to move quickly and with confidence, it is important that it receives timely and high quality advice from bodies such as ourselves. Therefore, we will follow closely the IASB's work and on a timely basis provide advice and other comments to help the IASB complete its work effectively and quickly, and evaluate and respond to any other relevant proposals on the subject that might affect financial reporting. In this situation we recognise and accept that it might be necessary for the IASB to adopt some sort of modified due process in developing its response. |
Click to view the Joint Statement (PDF 65k).
You will find much related information on our Credit Crunch Page.