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Most EU countries favour endorsing IAS 39 now

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31 May 2004

The European Commission has recently posted the (PDF 31k) of the 30 April 2004 meeting of the Accounting Regulatory Committee.

With regard to endorsement of IAS 39 for use in Europe, those notes say, in part:

 

Most Member States opposed postponing the date of application of IAS 39. Many reasons were invoked: advanced state of preparedness of companies, impact on European financial markets, impact on international agenda (convergence, etc.). One regulator stated that it was a matter of credibility for European capital markets to respect the deadline of 1.1.2005 set by the IAS Regulation.

Most Member States considered that progress had been made regarding both IAS 32 and IAS 39, whilst recognising that some important issues were still outstanding (e.g. insurance mismatch, hedging provisions, fair value option). One Member State added that since the perfect solution was out of sight, Member States should go forward since standard setting is an evolutionary process. Another Member indicated that it was not closing the door to any solution, while remaining very supportive of the position of the banking industry and hopeful that substantial progress could be achieved rapidly. Many Member States invited EFRAG to deliver its endorsement advice on IAS 39. The Chairman of EFRAG informed Member States that the Technical Expert Group was preparing its draft endorsement advice to the Commission.

Many Member States stressed that the situation had become critical in terms of timing for the endorsement of IAS 39 and that the market needed certainty. Nonetheless, all Member States agreed to last efforts being made before the end of May, suggesting that a mechanism be put in place to allow the Commission to consult them before taking a final decision. The Chairman indicated that another meeting of the ARC would be held early or mid-June for this purpose.

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