CEBS report on valuations of financial instruments
18 Mar 2009
The Committee of European Banking Supervisors (CEBS) has published a report titled 'Assessment of Measures Taken With Respect to the Issues Raised in the CEBS June 2008 Valuation Report' evaluating the measures taken by the IASB and by banks 'to improve the valuation of complex and illiquid financial instruments with the aim to enhance the quality and the comparability of banks' financial statements'.
With respect to measures taken by the IASB, the report concludes that:
- as a priority, the IASB should aim to address wider valuation-related issues such as impairment measurement of available-for-sale assets, treatment of Day 1 profits and losses and the determination of the effect of own credit risk and related disclosures;
- it should further clarify particular aspects of fair value measurement guidance; and
- clarifications should also be provided regarding all aspects of the reclassification of instruments containing embedded derivatives.
CEBS intends to review European banks' 2008 preliminary year-end financial reports and publish a report, by the end of March 2009, on the transparency of its accounting and adequacy of disclosures.
Click to view Assessment of Measures Taken With Respect to the Issues Raised in the CEBS June 2008 Valuation Report (PDF 257k).