EU ministers urge IASB to adopt recent FASB fair value decisions

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06 Apr 2009

Following their informal meeting in Prague on 3 and 4 April 2009, the EU Finance Ministers and Central Bank Governors (ECOFIN) issued a statement urging the IASB to adopt the conclusions on fair value measurement in illiquid markets and on impairment of financial assets that were approved by the US Financial Accounting Standards Board last week.

Our News Story of 3 April 2009 explains the FASB decisions. Click to Download the ECOFIN Statement (PDF 20k). Here is an excerpt.

The US standard setting authority is in the process of adopting new accounting guidance, with the aim of accurate valuation of assets in illiquid markets which are not functioning properly, which could provide their financial institutions with much more flexibility to move away from using distressed prices in these circumstances. They also propose amendments to current US GAAP impairment rules. These changes could result in a significant divergence of international accounting practice for financial instruments.

Ministers therefore call on the IASB to cooperate closely with the FASB in order to immediately address these issues, with the aim of achieving equivalent treatment and application of parallel standards in the IFRS and US GAAP systems, in order to avoid risks of competitive distortions emerging.

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