He noted that the IASB has focussed its response on three areas identified by the Financial Stability Forum and four issues raised by the European Commission. The Financial Stability Forum's areas are:
- the application of fair value in illiquid markets.
- accounting for off-balance sheet items.
- disclosures related to risk.
The four issues raised by the European Commission in the fourth quarter of last year were:
- the need for guidance about fair value measurement in illiquid markets – guidance has been issued.
- the desire for clarification regarding whether credit derivative obligations (CDOs) include embedded derivatives to ensure consistency between IFRSs and US GAAP – FASB is working on a clarification that will be in place for 2009 financial reports.
- the existing impairment rules related to available-for-sale instruments – IASB will issue an exposure draft in July 2009, two-month comment period, final revisions to IAS 39 in place and available for 2009 financial reports.
- the possibility of reclassification out of the fair value option into other categories – IASB will issue an exposure draft in July 2009, two-month comment period, final revisions to IAS 39 in place and available for 2009 financial reports.
The Chairman also noted that the Board is working on other issues relating to the financial crisis, including hedge accounting and provisioning. Click to download
Sir David's Statement to ECOFIN (PDF 21k).