January 2010: FEE paper on bank provisioning and reserving
The European Federation of Accountants (FEE) has published a paper Bank Provisioning and Reserving: A Comparison of Alternatives. The paper is intended to help clarify the meaning of particular terms used by policy-makers, banks, regulators, accountants, and others in respect of bank provisioning and reserving, "since there is not yet a common understanding of what these terms are meant to cover". The paper is also intended to assist the readers of the recently issued joint EFRAG/FEE paper Impairment of Financial Assets: The Expected Loss Model (see IAS Plus News Story of 10 Dec 2009) by providing background information and an outline of the key terms of the various approaches and models that are currently being debated. FEE's announcement also notes that the paper "may also help to better understand the current discussions on impairment in relation to the proposals of the International Accounting Standards Board (IASB) for the impairment of financial assets". Click for:
January 2010: Hearing on nomination of Michel Barnier
Two committees of the European Parliament will hold joint hearings on the nomination of Michel Barnier as Commissioner for Internal Market and Services of the European Commission. Mr Barnier has prepared Written Responses (PDF 156k) to questions posted in advance by the committees. His comments on accounting include:
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In the area of financial information, one of my priorities will be the adoption by all of our partners, including the United States, of high-quality global accounting standards, in line with the recommendations of the G20. I would also like to improve the governance of the IASB significantly. As regards SMEs, I would like to put forward an ambitious proposal for the
modernisation of accounting regulations. Lastly, with regard to the statutory audit of accounts, my priorities will be to enhance international cooperation in order to enable mutual recognition of supervisory systems in respect of [auditors], and potential adoption of the international [auditing] standards (ISA).
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The EU has set up a special Website for Commissioner Confirmation Hearings. Profiles of Mr Barnier and the other Commissioners-Designate are Here. Click for Mr Barnier's CV (PDF 76k).
January 2010: Revised CEBS guidelines on supervisory disclosure in Europe
The Committee of European Banking Supervisors (CEBS) has published revised Guidelines on Supervisory Disclosure.
CEBS'S framework for supervisory disclosure has been implemented at both EU and national levels since early 2007. This revision is the result of a public consultation in September 2009.
February 2010: Michel Barnier approved as EU Internal Market Commissioner
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The European Parliament has voted to approve the new European Commission – one Commissioner from each of the 27 EU Member States. The new Commissioners take office on 10 February 2010 for terms that end 31 October 2014. By that vote, Michel Barnier of France was approved as Commissioner for Internal Market and Services. Among other things, his responsibilities will cover accounting and auditing matters, including liaison with the International Accounting Standards Board and the IASC Foundation. Mr Barnier replaces Charlie McCreevy. Click for Mr Barnier's CV (PDF 76k).
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February 2010: European Commission conference on accounting and auditing
On 8 February 2010, the European Commission hosted a one-day conference on international developments in accounting and auditing. The morning session focused on accounting issues, and the afternoon on auditing. In the morning session, the first panel discussed national experiences in implementing IFRSs. The second panel discussed the progress made towards the adoption of IFRSs. Click for:
February 2010: New EU Commissioner comments on accounting
Michel Barnier, who took office last week as the European Commissioner responsible for Internal Market and Services, commented briefly on international accounting standards during a presentation on 16 February 2010 to the Ecofin Council (the council of economic and finance ministers of EU Member states). Mr Barnier's presentation was titled Acting Without Delay to Clean Up Financial Markets. Here is an excerpt:
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One of the strongest conclusions of the G20 was the shared commitment to reform together and to ensure convergence of accounting standards at an international level. To this end, we need to find the right balance between a faithful representation of a company's financial situation and wider financial stability. This issue will be at the centre of our discussions in the coming months.
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Click to Download Mr Barnier's Remarks (PDF 28k).
February 2010: EU Parliament hearings discuss accounting
The European Parliament's Special Committee on Financial, Economic and Social Crisis (CRIS) held a hearing on 25 February 2010 to examine financial regulation and supervision in Europe. Accounting standards were among the issues discussed.
- Bank of France governor Christian Noyer stressed 'the need for accounting standards to take account of the real risks'.
- Bettina Corves-Wunderer, CFO of Allianz Italy said that 'untransparent and insufficiently harmonised accounting standards had also led to procyclical behaviour'.
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Click to download Committee Press Release (PDF 126k).
March 2010: Possible exemption of EU micros from financial reporting
On 10 March 2010, the European Parliament voted to exempt very small companies ('micro-entities') from the existing EU-wide laws that require them to prepare annual financial statements. The Parliament's action still must be approved by the EU Council before it becomes law. If approved, it would then be up to each EU Member State to grant such exemptions. Parliament's resolution also calls for a general revision of the 4th and 7th Company Law Directives in 2010. Currently, about 7.2 million EU companies are subject to reporting rules under EU accounting directives. Of those, 5.4 million (around 75%) are 'micro-entities' primarily engaged in business at local or regional level, with little or no cross-border activity. Click for EU Parliament Press Release (PDF 109k). The European Commission is currently Consulting on the use of the IFRS for SMEs in Europe.
March 2010: DTT members respond to EC consultation on the IFRS for SMEs
The member firms of Deloitte Touche Tohmatsu (DTT) located in the European Economic Area (EEA) have submitted a joint response to the European Commission's consultation on the IFRS for Small and Medium-sized Entities. The Commission launched the consultation in November 2009 to gain an understanding of EU stakeholders' views on the IFRS for SMEs. The Commission said that the responses will assist the Commission in its ongoing review of the Accounting Directives. The firms' overall view:
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We believe that the IFRS for SMEs is suitable for widespread use within Europe and for companies of any type and size, providing such entities are preparing general purpose financial statements. IFRS for SMEs is a high quality, global, principles-based standard that has been developed by specialists from around the world through an extensive consultative process and we believe its adoption would benefit users (by increased comparability of financial statements) and preparers (through reduced costs for groups of companies and economies of scale generally) and would serve to facilitate cross-border trade, services, including accounting and audit, and movement of capital. In the European context, we believe this can contribute to making the internal market a reality for smaller businesses as well as benefit the many companies not listed on a regulated market that do operate across borders in the EU. There may also be reduced costs for Member State standard setters.
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Click to download:
March 2010: IASB Chairman addresses EU finance ministers (ECOFIN)
On 16 March 2010, IASB Chairman Sir David Tweedie addressed a meeting of the Finance and Economic Ministers of the European Union member states. He reported on the progress that the IASB has made in achieving the 2011 convergence target set out by the G20, and issues related to the financial crisis raised by the G20 and the European Union. Click to download Sir David's Prepared Statement (PDF Xxk).
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