McCreevy pushes for revised accountancy standards

Internal Market
Commissioner Charlie McCreevy has indicated that he will seek a
rewrite of the International Accounting Standard (IAS) 39, the rule
on  detailing derivatives in company accounts, which
has been criticised for not being compatible with
traditional EU practice.

Mr McCreevy is to meet with the chairman of the
International Accounting Standards Board (IASB), Sir David Tweedie,
in the next few weeks to discuss the new international accounting
standards.

The Commission adopted a regulation in September
2003 making the use of most of the International Accounting
Standards compulsory throughout the EU from January 2005. The aim
is to make EU accounts compatible with those produced in the US and
the rest of the world.

A bone of contention, however, is IAS 39, the
standard used to show the impact of derivatives on accounts, which,
the Commission feels does not make sufficient provision for EU
companies. As a result of opposition, particularly from French
banks, this standard was not fully adopted by the EU (see
EURACTIV 13 June
2003)

At the forthcoming meeting, Commissioner
McCreevy will push for a revised version of IAS 39. He is also
concerned at the accountability of the IASB. The board, which was
set up in 2001 is an independent, privately funded body, which aims
to develop a globally accepted set of accounting standards. Because
of this structure, the Commission has no direct say in the drafting
of rules, although it has to approve them before they become EU
law.

The IASB is also to hold meetings with
representatives of industry in February to discuss the IAS39 and is
expected to meet with opposition from bodies such as the Comité
Européen des Assurances, which represents national associations of
insurers. They have criticised the board’s proposals.

The harmonisation of accountancy rules and
practices could be further boosted by moves to facilitate the
movement of accountants themselves. Accountancy organisations
across Europe are working to standardise qualifications across the
EU.

One of the problems with the initiatives in
financial services is that in many areas and member states they
have not been implemented. In December 2004, Commissioner McCreevy
showed his determination to tackle this by backing Commission
enforcement action against member states which have not implemented
existing Financial Services Action Plan legislation.

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