The comment letter is dated 26 July 2012, but was only made available by ESMA now.

In April 2012, ESMA had submitted a request to the IFRS Interpretations Committee asking to clarify the accounting of the exposure to Greek sovereign debt arguing that IAS 39 Financial Instruments: Recognition and Measurement does not offer enough guidance in this respect. ESMA wrote: "This results in difficulties to understand how the standard should be applied [...] and could raise enforcability issues."

After the Interpretations Committee tentatively decided not to add the issue to its agenda in May 2012, ESMA published the original submission, which also contained several suggested accounting treatments, in order to underline its point.

ESMA has now published its comment letter on the tentative agenda decision in which stresses its view once more:

European enforcers of IFRS note varying accounting practices for debt restructurings by lenders due to the lack of clear guidance which leads in turn to decreased comparability between financial statements

ESMA does not agree with the Committee’s conclusion not to add the subject to its active agenda nor to recommend the Board to perform further work. It now encourages the IASB to consider the concerns as part of its ongoing deliberations on IFRS 9 Financial Instruments.

Please click for:

• Original ESMA submission (link to ESMA website)
• ESMA comment letter on the tentative agenda decision (link to ESMA website)
• Deloitte observers notes from the discussion of this matter at the May 2012 Interpretations Committee meeting